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The performance in beans has not been shabby this week either as at the current price of 8.56, November futures would be 6-cents higher for the week, up for the 2ndweek in a row and pressing against what has been a key resistance level. Believe it or not, at this level we would be up 10-cents for the month as well. As I have commented in previous letters, the fundamental and technical pictures in beans currently seem to be at odds, and while it would be premature to say which will ultimately prevail, I have come to trust the technical in situations such as this. By no means would I suggest that the bean market is ready for a massive advance or even that we have the momentum to extend right now. That said, markets or rather, market participants become complacent when the news has been weighted to one side for a prolonged period and surprises, such as the wet weather damage in the south, can provide a surprise. For that matter, no one can guarantee that South America will have a great growing season. As the old saying goes, when everyone is thinking the same, no one is thinking.
Wheat is the market that has come out in the short end of the stick. At the current price of 5.12, December futures are just over 10-cents lower for the week, 34-cents lower for the month but for the quarter, down just 6-cents. This is the market that everyone just “assumes” will remain dead in the water as both domestic global stocks remain at very comfortable levels, but as I have pointed out previously, remove the Chinese stockpiles (52%) from the inventory and the picture changes dramatically. You know what they say happens when we ass-u-me things.
We do have one last report to move beyond before we finish this week/month/quarter which is the quarterly grain stocks. Once again here are pre-report trade estimates; September 1stcorn stocks are estimated to come in at 2.343 billion bushels, beans at 401 million and wheat at 2.343 billion. There is also a wheat production update, and the trade is expecting to see a total number of 1.872 billion bushels. Of this total 1.188 billion is winter and 684 million spring. While I would not expect any surprises, without something positive, it would appear we could be in line for a corrective break in early October and if correct, could be a real test of just how much control the bear really has.
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