Prices End Week on High Note

November 30, 2012 09:57 AM
Prices End Week on High Note

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

The grain markets continued a steady recovery that began two Fridays ago before a setback on Thursday’s trade. Before the late week setback corn values closed unchanged or higher in 8 of the last 9 trading sessions. A rally that was over $.50 from its mid-November lows.

There has been little movement in Washington in regards to the current economic situation. (I think we are all tired of hearing the term "Fiscal Cliff") However, it appears that some of the fears that were prevalent in the market in the first half of the month have been reduced by some small signs of compromise and perhaps a realization that the "cliff" may actually be more of a "slope" that may have its impact felt over time and hopefully staved off by compromise.

The rally this week was aided by the strongest weekly export figures of the marketing year in corn last week as well as growing concerns for the winter wheat crop. However, this week’s exports were a disappointing 10 million bushels, which leaves the year to date total down 26% from the current USDA estimate. The Kansas City wheat contract has rallied over $.50 from its recent lows as reported crop conditions are the worst in 25 years.

Further technical strength was the result of a corn market that violated its 50-day moving average. March Kansas City wheat rolled through a convergence of key moving averages near $9.15 which spurred more technical buying. The grain markets may now have reached levels where consolidation is expected and perhaps a 30-50% correction from this week’s highs. March corn stopped at its 100 day moving average on Wednesday.

We would look for a correction back to the $7.45 basis March corn over the next few weeks, before a steady to higher trend to resume into the January production report. The top end of our expected trading range is near the $7.85 to $7.95 where we will look to extend sales.


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