Looking forward to Monday’s USDA Supply and Demand report
Jan 09, 2009
Traders have been working all day at getting ready for Monday's USDA Supply and Demand report. Expectation going into the report is for beans to be bullish, wheat to be neutral and corn bearish. The obvious question is will the bullishness of beans overpower the bearishness of corn? So far beans have been the leader and I would expect this pattern to prevail until we get some rains down in South America. Today’s weather reports have taken much of the rain out of the forecast which pushed beans sharply higher today.
So looking to Monday, I will be watching March corn carefully as to how it trades between the $4.21 and $4.28 level. If it gaps above on strong buying because of the bullish beans, I will be watching to be a strong day trader on the short side.
In regards to beans I truly believe the bean bulls are just about to factor in all the bullish elements. We could have one more bullish event which will be the final 2008 production numbers later this month. As we move into early February, I see little to no reason for beans to continue their upside price moves in the November 2009 beans. My focus will be to watch very carefully for a bullish report and bearish reaction in the deferred contracts. I continue to stress the potential for a large increase in acres which will put big pressure on November beans.
So in summary: I would like to sell a bounce up in corn and price on correction into early February and then be neutral to bullish corn all the way into early summer while beans would be the complete opposite pattern. In the end, this should add a lot of confusion and volatility to the market. All producers can do is decide what they want from the market and be prepared to act when opportunities are given.
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