Markets rallied sharply today after the European agreement was seen as very bullish for outside markets. December corn finished 14 ¼ cents higher at $6.51 ½, November soybeans up 24 ½ cents at $12.35, and December wheat up 24 ½ cents at $6.44.
Today’s strength was mainly derived from the strength in outside markets. The Dow Jones futures were at one point trading over 400 points higher and the US dollar over 1600 lower. A currency move as large as this usually draws quite a bit of support in commodities and today’s move was no exception. We are again right back at the 200 day moving average for December corn, and 30 day moving average for soybeans.
Even though grains rallied, export sales were rather weak. Here are the expected vs actual results for this week’s report:
Estimated Range Actual
Corn 650,000-900,000 MTs 361,300 MTs
Soybeans 650,000-950,000 MTs 254,600 MTs
Wheat 300,000-500,000 MTs 316,800 MTs
Given our weak export demand and being undercut in the world market by cheaper substitutes, we think this is another sign this market is going to have a hard time sustaining rallies. This can certainly change if yields come in much lower on the November 9th report, or we have a foul weather event in South America.
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Chart: December Corn
Chart: November Soybeans
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