Grains finished mixed with small net changes on the day. For the week corn settled 3 cents higher at $4.54, soybeans 4 ½ cents higher at $13.19 ¾, and wheat 36 ¾ cents higher at $6.83. Wheat clearly had the best gains which can be mostly attributed to the global supply situation and short covering ahead of Monday’s wheat production and stocks report.
From the chart you can clearly see where wheat has broken out of its downtrend. If the short covering continues the next major target would be in the low $7.40’s right at the 38.2% retracement level.
December Wheat Weekly Chart
We are still bearish corn but if for some reason this wheat rally continues we can see that as providing at least some support for corn. As you can see from the chart below, corn and wheat have been highly correlated. If wheat hadn’t caught a bid over the past few days we probably would have taken the lows out again for corn.
December corn (black bars) December wheat (blue bars)
The next thing to watch is the report results at 11:00 am Monday, September 30th. For option strategies to protect your operation through harvest please give us a call for a free consultation (866) 433-4371. Have a great weekend!