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Middle Tennessee | Wednesday trade in corn started promptly with the evening swing shift. On Globex’s normally quiet 7pm open, 37k contracts of December ’15 corn traded within 60 minutes. That volume concentration is usually reserved for the monthly WASDE releases, in the afternoon. Those trades were as quiet as they were large, with no traces of them on the intra-day bars provided by the CME or my trading platform. Calendar spreading seemed to be involved with a spike in nearby spreads and almost no flat price response. Pretty sneaky miss, as they used to say. Ultimately, flat price did follow the bull spreads, and corn made a measured but very firm close above the 50-day moving average.
Soybeans too followed through on Tuesday buying with “rumors” of Chinese purchases: Guys, they are not rumors, government reports are showing the imports on daily and weekly releases. Today it looks highly likely that the rally 8 days ago was only the first shoe to drop.
Wheat built on Tuesday’s reversal, closing strongly into virgin green territory on the week (the same can be said of corn and soybeans actually). Unquestionably, El Nino this fall has hurt global wheat production, perhaps most notably in Australia and India. Establishment conditions in Russia are adverse. I haven’t looked at specific line items in USDA’s global production projections, but I get the feeling that those numbers may finally actually decrease in upcoming reports, a development I’m not sure we’ve seen in a while. Sellers had their way early in the week with the imminent rain looking to spillover from the Panhandle areas, and prices have reversed decisively off $4.83.
Increasingly it appears that $4.80 in wheat, $9.00 in beans, and $3.75 in corn are going to be tough nuts for bears to gnaw through in the near future.
Edited by LongKC 10/21/2015 15:41
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LKCW Nightly: 10-21
