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EHedger Afternoon Grain Commentary 11/5/12
Nov 05, 2012
The liquidation continued from Friday with January soybeans closing 23 ½ cents lower. December corn closed 4 cents lower at $7.35 ½ and December wheat was up 1 ½ cents at $8.66.
The market is taking risk off the table ahead of the election and over fears of higher production estimates on Friday’s Supply and Demand report. FC Stone and Informa released their estimates at the end of last week and we have had two days of liquidation since. We have included our own estimates in the charts below. We will add the average market guess when the Reuters and Dow Jones release their analyst polls.
Corn closed below the 100 day moving average on Friday for the first time since June 18th. If we fall below the low of the range ($7.32 ¼ Dec) we could see further liquidation to take us back towards the late September lows.
Soybeans started to fill the gap on the most recent lows in October but didn’t quite make it. For January that level would be $14.74 ¼. If we break the $15.00 support level I would look for beans to try to fill that gap.
Crop Progress shows the wheat condition at 39% good-excellent which is down 1% from last week. The next USDA report will come out on Friday, November 9th. If the USDA estimates fall in-line with these private estimates the extra supply may be enough to take us back to the recent lows. If the USDA remains neutral I believe we will stay range-bound until we get to the January reports. Domestic basis remains strong for corn and exports remain strong for soybeans. To receive a free trial of our commentary including hedge recommendations please follow the link below.
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