AgDay Markets Now: Don Roose Explains Why Grains Pushed to New Near Term Lows

Don Roose of U.S. Commodities says funds are selling in the grains markets due to bearish technical signals and lower seasonals, plus gearing up for bearish USDA Reports.

Grains see another bloodbath on Tuesday with massive fund selling and new lows for the move scored across the complex.

Don Roose of U.S. Commodities says funds are selling due to bearish technical signals and lower seasonals and they are near record short for this time of year in the grain complex. “When you’re in new lows that’s no sign of a positive market on corn and soybeans,” he says.

The next area of chart support on November soybeans is $11.00 according to Roose and $4.40 on December corn.

He says traders continue taking out weather premium despite lower crop ratings and flooding in the Northwestern Corn Belt. “The problem is the crop ratings started at a high level,” he says.

The funds are also leaning bearish heading into the USDA acreage and quarterly stocks reports on Friday and the trade is expecting higher carryover than a year ago.

Plus, its first notice day on Friday and the start to the delivery period. So Roose says farmers are rolling or pricing basis fixed contracts from the July which is adding to the pressure.

“First we had June options expiring last Friday you know that kind of put us down to some of these strike prices, then we have first notice day coming up here the end of the week. So, we’re going to find out who wants to own these deliverable stocks,” he adds.

Wheat harvest has also been moving quickly and weighing on that market with new bushels coming into the pipeline.

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