This information is provided by Archer Financial Services, Inc., 800-933-3996.
What a difference a week makes! It was just a week ago that many involved in the grain markets were prepping their comparisons to 2008, as the questions began to arise as to how low can these markets fall. Most of those fears have been temporarily erased as the corn market surged to limit gains on Tuesday on the back of rumored Chinese buying in both corn and soybeans.
The confirmation of that business arrived on Thursday, as it was announced that China had purchased over 35 million bushels of corn and another 11 million was registered to an unknown destination, which may ultimately revealed as Chinese business. In addition, China was a solid buyer of soybeans this week, with rumors continuing to swirl about additional near term business.
Sandwiched between Tuesday’s limit move and Thursday’s announced export business was a rather benign USDA Monthly Production/Supply and Demand update.
On the week, corn rallied 40 cents and soybeans rallied over 1 dollar. Wheat was the laggard this week as higher US and Global stocks kept the market in check. These markets now seem to be setting up in a somewhat tight range.
Corn surged to levels this summer where demand destruction appeared and fell over the last month to levels where new demand was discovered. Those recent parameters may very well hold this market for the next few months unless a production surprise appears in November.
Hedgers should look to sell rallies toward $7.00 in December corn and $13.50 in January soybeans, while looking to exit or defend that protection as prices slip toward $6.00 and $12.15 respectively.
(click the charts below to enlarge)