Grains started out sharply lower along with the stock market but were able come off their lows after the stock market turned higher from news that the ECB would be bailing out Italian and Spanish debt.
Grains have obviously been largely affected by outside markets in the last couple of trading sessions, but even with the weakness, corn has managed to hold support quite well. The market is still obviously concerned about corn supply and was able to stage a corn rally to positive territory late in the day. As long as lower yield forecasts continue to come in, it looks like we are going to keep this market supported and potentially even take out the highs again. December corn’s resistance still stands at the contract high of $7.22 ¾.
Next week will be a big week for grains. We will have crop conditions reported on Monday afternoon, and the August Supply and Demand report released on Thursday the 11th. The S & D report should give the market more direction as everyone is wondering what the USDA will do with acres if they make any changes. We should have the average analyst estimates on Monday and I will have them in the afternoon grain letter.
We want to remain in sustainable positions, and stay well hedged at these levels. I wouldn't rule out further weakness from this latest economic setback, we had the same thing happen in 2008. Please call your broker if you need additional coverage or want to go over your current position. We have option strategies available that can cover a larger amount of bushels with a minimum bushel level of upside margin exposure.
Have a great weekend!