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Wheat Remains Steady Despite Negative Report

December 9, 2011

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

 

The corn market this week had 2 ½ good closes. We started the week with negative trade, as the same issues that have plagued the recent trade continued to weigh on the market. European debt concerns as well as Japanese purchases of Ukrainian corn to start the week caused a violation of the Oct. 3 low. The corn market had a strong close on Tuesday though, closing on its high up 5 ½ cents on the day.  Thursday saw the highest weekly corn export figure in seven weeks, yet the market still had to shake off some early weakness that ended in an outside day up and a 7 ½ higher close.

Friday’s USDA report had no positive news for any of the grains. 

The worst news was reserved for the wheat market, which saw a cut in the projected export figure of 50 million bushels, yet it put together the best daily performance, closing only a penny lower. The funds are very heavily short the wheat market, which likely reduced the selling even in the face of a negative report. 

The soybeans had the weakest day on Friday to erase what had been a mostly steady week. Soybean carryout increased by 35 million bushels on a cut in both domestic and export usage.  There is a fear that the carryout estimates may continue to decline as estimated soybean crush may still be overestimated. This will leave the soybean market in a funk until a weather issue arises in the Southern Hemisphere. 

Even with the weakness in soybeans, the corn market managed to conclude the day with a respectable close. March corn held its previous day’s lows and the result was a midsession close.  Corn appears ready to challenge the upper end of its trading range as long as pressure in the soybeans does not tip the cart. 

Producers should look to year-end strength to establish some hedge protection, with the best chance of a substantial rally to corn to come on the back of a weather problem in South America or a bullish production report in January.

 

 

(click the charts below to enlarge)

 movement 1209

 

weekly 1209

 

COT 1209

 


 

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