Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
Selected Observations
Dec ‘10 corn futures are now trading at $4.31, within striking distance of the December high and resistance of $4.38. Outside market forces are supportive with crude higher and the dollar lower. The weekly export sales came in above expectations. Considering we have been up in the high end of the range and export sales have been huge the past two weekly reports, the export sector is supporting the bull move. Crop maturity across the country as a whole is ahead of normal, which promotes an early harvest as long as weather holds. Eventually, expected harvest pressure is likely to take the corn market lower.
Soybean trade is 10 higher today with Nov ‘10 soybean futures now trading at $10.08 per bushel, with support at $9.97 ¾ and nearby resistance at $10.17 per bushel. The higher bidding is attributed to outside market forces and spillover support from corn. The weather picture looks neutral to negative; without a weather problem it should be hard for beans to even challenge the recent highs, but we also appear to have good support below $10 based on the action this week. The weekly export sales were reported on the high side of expectations.
Wheat trade is 13 to 20 higher with Dec ‘10 SRW wheat futures bidding at $6.96 per bushel due to a combination of profit-taking by recent shorts and continued global supply concerns. Significant moisture across France, Germany, and parts of the EU has occurred this week, which has raises some concerns over quality issues. This storm system is also expected to produce widespread rains across most of the Russian wheat country, which should go a long way to improve their winter planting conditions. The psychology of the wheat market is still bullish with good buying interest in the mid $6 range. The weekly export sales report was above expectations. As long as we continue to see good weekly sales numbers the trade must respect the demand, however, our heavy domestic balance sheet will continue to weigh in on the bearish side.
Source: DTN
Market Strategy
Major uncertainty prevails concerning the state of the economy and the resulting impact upon commodity prices. Slowing demand in the U.S. and world will likely have a negative impact upon commodity prices. The Dow, now at 10,005.49, has continued its recent slide this week. A further decline in the Dow could become a deterrent to commodity prices.
Commodity prices remain at levels where advancing sales for corn, soybeans, and SRW wheat still makes sense. The U.S. row crop harvest will be underway in earnest soon. Considering the distinct possibility that the 2010 harvest will be record or near record is all one needs to know in order to justify completing pre-harvest sales and making harvest sales as long as it is advantageous to do so. The next USDA Supply and Demand report will be released on September 10.
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.