Week Ends with Commodity Price Explosion

August 26, 2011 11:31 AM
 

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

A steadily higher trade this week ended with a price explosion into new contract highs for both December corn and November soybeans. Corn values finished the week over 40 cents higher while soybeans finished 55 cents higher. 
 
The main catalyst this week was the Pro Farmer crop tour which bombarded the market on a daily basis with corn and soybean yields that would fit squarely in the “disappointing” category. 
 
Following Friday’s close, Pro Farmer predicted the average national corn yield at 147.9 vs the USDA August estimate at 153. The Pro Farmer soybean yield was revealed at 41.8 vs the USDA estimate of 41.4. The corn estimate will likely be near the lower end of trade ideas leading up to the USDA’s updated estimate on Sept. 12. 
 
Many in the trade suspect that corn is likely trading an average yield of 148-150 based on this week’s rub up, so mild support may be seen from this figure. The soybean estimate may very well be a disappointment to the trade on Sunday night. 
 
Huge buying by the funds through Tuesday’s trading session only grew as the week went on, so someone certainly felt soybeans were undervalued. 
 
The market will likely be void of fresh market news over the next 2 weeks as we await the USDA’s updated data. Throw in holiday related profit taking on recent longs and these markets are vulnerable to 30-50% retracements over the next 2 weeks.
 

 

(click the charts below to enlarge)

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