It was another sharply higher close at the Chicago Board of Trade for grains. December corn closed 29 ½ cents higher at $5.63 ½, November soybeans closed 45 ¼ cents higher at $13.84 ½, and July wheat closed 19 ¼ cents higher at $6.49 ½.
Weather and lower crop ratings account for the majority of this strength. Yesterday afternoon corn’s good-excellent rating dropped by another 3 points and is now at 63% good-excellent. Soybean’s rating dropped by 4 points and is now at 56% good-excellent. After two consecutive weeks of significant drops in crop ratings and more dryness in the forecast the market is certainly worried about declining production. This has prompted the two day run in corn bringing December within a penny of its 200 day moving average. Dec corn has not been above this average since November 10th 2011!
Chart: December Corn
November Soybeans rallied to within 5 cents of their contract high at $14.00! A settlement above $14 would be technically strong and given the current fundamentals and momentum soybeans may try to surpass this level soon.
Chart: November Soybeans
Tomorrow we have the weekly ethanol production report (9:30 am CST) as well as the FOMC statement (1:15 pm CST). If the Fed decides to continue its "loose" monetary policy we could see more dollar weakness and commodity strength. For now the weather forecasters will still dictate market direction, so watch for any changes to the morning and midday models. If you would like to receive a free trial of our research including hedge recommendations, please sign up using the link below. To discuss opening an EHedger account with one of our experienced agricultural brokers, please call 866-433-4371. Thanks and have a great week!
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