Crop Tour To Kick Off With Fund Attitudes Shifting and Nov. Beans At A Critical Crossroads

August 16, 2013 01:10 AM
 

What Traders are Talking About:

Overnight highlights: As of 6:00 a.m. CT, corn futures are trading 4 to 6 cents lower, soybeans are mostly 2 to 6 cents lower and wheat futures are 1 to 3 cents lower. Key today will be whether traders step up to buy the overnight weakness during the day session. If that happens, it would signal attitudes have clearly shifted as traders had been looking to sell strength. Cattle futures are expected to open higher this morning, while hogs are expected to open mixed in the day session.

 

* Crop Tour next week. We'll get a first-hand look at crops across much of the Corn Belt next week as we scout roughly 1,100 corn and 1,100 soybean fields on the Pro Farmer Midwest Crop Tour. Pro Farmer Editor Chip Flory will lead the western leg of Tour, while I'll be guiding scouts across the eastern leg. Both legs of Tour will meet Thursday evening, Aug. 22, in Rochester, Minnesota, for the Tour finale. You can follow our findings and coverage of Tour throughout the week on our homepage. And you can even sample your fields the same as we do on Tour and enter your results via our Virtual Crop Tour page. And don't forget to follow along on Twitter via #pftour13. Also follow Tour leaders @ChipFlory, @BGrete, @JasonFranckNC and @MNWeedWizard on Twitter throughout the week.

The long and short of it: As is always the case, market attention and media coverage of Crop Tour will be strong. Make sure you stay up-to-date with our Tour observations and findings.

* Funds actively cover shorts in corn, buy beans. Funds bought a net 22,000 contracts (110 million bu.) of corn Thursday and have purchased a net 34,000 contracts (170 million bu.) of corn so far this week. While that's a huge move on the "buy" side of the market, funds held a record short position in corn to start the week, so the bulk of those purchases were the covering of short positions. Still, it shows attitudes aren't nearly as bearish now as they were last Friday. Funds have also been active buyers of soybeans this week, purchasing a net 10,000 contracts (50 million bu.) yesterday and a net 26,000 contracts (130 million bu.) for the week. USDA gets some of the credit for the fund buying as it's first survey-based corn crop estimate came in 242 million bu. lower than anticipated and its soybean estimate was 81 million bu. than expected. But weather is also a factor in the active fund buying as forecasts call for normal to above-normal temps and very little rainfall chances over the 10-day period.

The long and short of it: Speculative attitudes and money flow have perked up, but there are still a lot of hurdles to clear for corn and beans to sustain a price recovery.

* Nov. beans at a critical technical juncture. Nov. soybean futures rallied $1.09 1/2 from last week's low to Thursday's high. That resulted in the contract challenging the long-term downtrend from last summer's contract high. The contract moved above this trendline on rallies in June and July, but both times it turned into a bull trap as buying interest dried up soon after the trendline was cleared with the July high stopping short of the June peak. To further extend this price recovery, Nov. soybeans must find fresh buying interest above the long-term downtrend and clear the last two corrections highs.

The long and short of it: Be prepared to advance new-crop soybean sales on the price recovery. While the price recovery has been impressive, bulls still have a lot of work to do in order to signal a potential trend change is in the works.

 

Follow me on Twitter: @BGrete


Need a speaker for a seminar or special event? Contact me: bgrete@profarmer.com

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