Grains explode higher 8/03/09

Published on: 17:00PM Aug 03, 2009
Sep 09 Corn
358 ¾  
+ 19 ¼
Dec 09 Corn
369 ½ 
+ 20
Aug 09 Beans
+ 39
Nov 09 Beans
1030 ¼  
+ 48 ¼
Sep 09 Wheat
549 ¾  
+ 21 ½
Sep 09 KC Wheat
+ 19 ¾
Sep 09 Min Wheat
625 ¼  
+ 20 ¼
Dec 09 Meal
+ 9.6
Dec 09 Oil
+ 2.44

-FC Stone estimates corn yield at 160, soybeans 42.4
Corn, soybeans and wheat all closed sharply higher. Soybeans led the rally early, closing 50-cents higher in the overnight trade. After last week’s sharp rally, forecasts calling for some ridging in the 6-10 day outlook and stronger outside markets helped draw in additional buying. This buying helped push soybeans and corn through some major technical levels and in turn caused more short covering and new buying. The U.S. dollar index made new lows for the year and the stock market made new highs for the year. These factors also helped attract new buying to the commodities markets. We typically see “new money” enter our markets at the end of the month and again during the first of the month. On Friday, I thought that another round of buying could help soybeans rally to $10.25 and corn to $3.60 sometime this week. Once again, the market surpassed those levels in one day! With the crop behind in many areas, the market remains very “touchy” to any adverse weather forecasts. This will likely keep our markets very volatile over the next two months. “Hot and dry” and “early frost” will be common talk and common worries as we head into harvest. We have rallied much higher (and faster) than I thought we could. Soybeans are back to some key technical levels (chart below), and how the market handles these levels should determine if more buying will come in or if we will start to liquidate. As a producer, I would make some sales today and some tomorrow. “First of the month” buying should be winding down and the CFTC will rule on how to “deal” with Index funds. This could cause another sell-off late tomorrow. How those hearings turn out will be very important.  

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