Grain markets fade early strength after running into chart resistance and seeing some profit taking.
Dave Chatterton, Strategic Farm Marketing, says December corn hit the 200-day moving average again and didn’t find any new buying, so it failed at that chart areas and saw some selling pressure. Plus, the wheat market drug corn down.
Plus, the bulls need to continue to be fed by a bigger weather story as the funds have covered a large portion of their short position.
“That doesn’t mean they won’t cover the rest, it doesn’t mean they can’t go long this summer but the old market adage that you have to feed the bull every day means we have to keep seeing those adverse events come in,” he says.
Chatterton says the midday GFS weather model went a lot wetter for the East and Central Midwest. “The models show upwards of three to five inches in the 10-day outlook. So, there’s definitely going to be some challenges there, but I think the market is going to need a better definition about what that means for planting dates and what it will ultimately mean for yield and production.”
NOPA crush was also disappointing for the soybean complex coming in at 166 million bushels which was well below trade estimates.
The wheat market may have priced in the lower Russian wheat crop and global crop concerns as well. The Wheat Quality Council Tour in Kansas is also seeing better yields than a year ago on the first day and a half, which sparked some selling. “However, I think those yields will come down as they get into the drier areas farther West,” he says.
