Grains had double digit gains across the board today on concerns of lower world wheat production. September wheat was the upside leader gaining 30 ¾ cents to close at $8.85 ½. December corn closed 18 cents higher at $8.13 ½ and November soybeans 30 ¾ cents higher at $17.53.
The trade talk revolved around the Russian grain meeting coming up this Friday and concerns over a potential export ban implementation. The fact that their yields are coming in lower than last year and the export sales pace has been strong has led the market to believe they may be a bit oversold. The market is also looking at recently strong world wheat demand and dry conditions in Australia as a potential for another bull-run for wheat. The strength in wheat translated into strength for corn and soybeans as we head towards the long weekend.
The weekly EIA numbers showed lower ethanol production and unchanged stocks. They also had a bearish crude oil stocks number which put crude oil back below $95 per barrel.
Tomorrow’s weekly export sales report is expected to show 250,000 – 450,000 MTs of corn, 600,000 – 800,000 MTs of soybeans, and 450,000 – 600,000 MTs of wheat. We will release the sales in the morning letter.
Soybeans continue to look strong until we see a significant change in demand. Upside resistance is seen in November at $17.98 and downside support at $16.65. The all-time contract high from Monday is $17.60 ½ for November, look for stops above this level.
Chart: November Soybeans
December corn found support at the low end of the channel today. Near term support is seen at $7.97 with upside resistance at $8.47. It looks as though we are stuck in range bound territory for now.
Chart: December Corn
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