Wednesday corn and soybeans were higher with wheat again leading the way sharply higher. Just like yesterday we came into the day lower from the overnight trade but quickly found buying support in the day session. At settlement December corn was 6 ¼ higher, November beans were 4 ¾ higher, and December wheat was 10 ¾ higher.
Many times this year traders bought grains on Wednesday in anticipation of a bullish export sales report on Thursday morning. There has also been recent speculation circulating the market that China will start buying US corn. Corn has already been bullish from weak production in the US so if we see a spike in corn demand from China it would be considered very bullish. Soybean demand has been strong but much of this demand has already been projected. Tomorrow the estimates for weekly exports are 600,000-900,000 MT's for corn, 1,100,000 - 1,150,000 MT's for soybeans, and 600,000-800,000 MT's for wheat.
Wheat's strength is still mostly attributed to the fact that the funds are net short Chicago wheat against net long corn and soybean positions. They are likely exiting many of these positions after the latest crop conditions report showed winter wheat at only 47% good to excellent compared to 62% this time last year. Over the past week wheat has been at its cheapest levels compared to corn and beans for a long time so it didn't take much for those spreads to reverse.
Crop progress shows harvest at 83 percent complete for corn which is well above the 5 year average of 49 percent at this time of year. Soybean harvest is at 91 percent complete and is ahead of its 5 year average of 72 percent at this time of year.
Between now and the next WASDE report (November 9th) we like staying well protected in cash sales and have our upside potential in spring call spreads. Please call your broker if you still need to get the spring call spreads on.
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