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Grains Search for Export Market

November 18, 2011

This information is provided by Archer Financial Services, Inc., 800-933-3996.

 

It was a tough week in the grain markets.  Prices slipped across the board with corn down nearly 30 cents.  It seemed as if soybeans had put together a strong negative week, but in the end they were only off just over 7 cents.  Early week strength in the soybeans gave way to liquidation pressure on Thursday. 

 

For weeks, it's seemed that grains were poised for a break out.  What we didn’t know was which direction that would be.  That question was answered on Thursday as a weekly export figure of just 8 million bushels had shown a strong light on global competition for corn trade. 

The U.S. continues to see some of their most reliable customers from Asia turn their back on U.S. prices in favor of cheaper feed grains in Black Sea Region. There was obviously going to be technical momentum arise once any breakout occurred, which is what accelerated the break on Thursday and created follow through weakness Friday morning.  The market bounced back late Friday, as we simply ran out of aggressive sellers. 

This market is trying to search for a price in which export demand will show signs of life.  With the profit levels for domestic users at such attractive levels, it would not take much activity on the export front for the grain markets to once again become concerned about their tight balance sheets.   

 

(click the charts below to enlarge)

 movement1118

 

weekly1118

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