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Mascoutah, Illinois | I am not trying to rain on anyone's parade with some of the comments I read below. It is not NEW news that Minnesota is going to harvest an all time record crop. It is not NEW news the corn crop in Central Illinois is below average. This NEWS is old by at least six to seven weeks. Neither one of these phenomenons is going to shake the market one way or another for the time being.
I reiterate one more time, the highs are in until the end of November. The price action in soybeans began to deteriorate when we failed between $10.45 and $10.49. The price action in corn failed at the $4.39 retest late last week.
What catalyst will be taking us higher in the near term? I don't see one. The air has been let out of the wheat market and it is range bound between $6.45 and $7.00 in the September contract. Crude oil is falling which is negative to the soybean complex. Slower if not negative growth is being priced into the energy market and we better hope crude doesn't see the $50.00's or we are going to have many long faces and lots of tears on this forum as prices correct. I hope many folks have made sales in the past three weeks.
We could see a quick rebound in the soybean market in the near term IF a major hurricane makes its way into the Gulf of Mexico and forces crude higher.
The corn market has priced in a crop of 164-165. I do not believe the number ends up higher when harvest is complete but lower. Some folks will take the other side and say higher than 165. These views of bullish versus bearish is what makes a market. I am in the camp of a crop of 162.56 but would not be suprised if the number ends up lower.
For the time being, you have to respect the price action in grains which is neutral to lower. I am a short term bear looking for price corrections to $4.07 in December and $9.75 in November. Will we see aggressive buying after the Labor Day Weekend to change my stance? It could easily happen, but I am not on board with that scenario. We know where our resistance levels are in corn and soybeans with $4.39 in December and $10.49 in November.
Longer term, I am a bull and I believe a bidding of acres will take place next spring. I believe corn could see $4.90-$5.10 and soybeans $11.25-$11.75.
I would tuck this $4.75-$5.00 thread away until sometime after the middle of November after most of the harvest is complete. We will have a great deal of clarity on yields at this date on the calender. Fund managers and traders will act accordingly based upon the yields being reported.
We do not have a near term catalyst to take us past resistance levels. That scenario (in my humble opinion) will change after the Thanksgiving turkey has been carved and devoured.
Keep in mind, this economy could continue to sink and folks once again will hunker down just like they did in 2008 and 2009. (Some folks are still hunkered down since the collapse.) The bad news is continually shoved down our throat by the media and two parties dueling into a midterm election. If the economy continues to sicken, you can throw all bullishness out of the window and hope corn doesn't break the summer lows of $3.35.
Keep the thoughts and reports coming. We are our best eyes and ears. | |
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$4.75-$5.00 corn thread from below
