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| Huge day for the grains, as we follow up last week's strong action with more upside today.
On Friday, corn closed above $4 for the first since since August 6th. Beans closed above $10 for the first time since August 9th.
This move followed up corn & KC wheat's weekly key reversals from last week. All the charts look very strong as we took out several layers of resistance for most.
All grains also closed above their 35-day moving averages for the first time May.
We saw yet another flash sale of soybeans to China. Not a huge amount, but we are starting to see sales pick up with rumors that China wants more.
Yes, bean exports are FAR behind. BUT these past 4 weeks have been amazing.
The 5 year average for the last 4 weeks is 5.25 million MT. We exported 6.6 million.
The past week alone we exported 2.6 million. Which was the best week in history for that week.
So still running way behind, but a good start.
Another big potential headline is still Brazil.
Brazil is having it's worst drought since 1981.
It looks like their bean planting is going to be delayed until October due to below average rain forecasts for Sep-Oct.
If this happens, it will give us another month for export business. Still too early, but it is a reason for the funds to possibly cover.
The two week forecast shows zero rain. Usually rainy season picks up in Sep-Oct.
If you are the funds, this is something you are watching.
If you are China, this is also something you are watching.
Not a huge deal today, but right now the USDA projects a monster Brazil crop and a large US crop. Neither of those are set in stone.
If a few weeks from now it is still this dry, and the forecasts still look dry we could definitely see a weather scare.
Funds still hold MASSIVE short postions.
The funds have actually been buying/short covering a good amount of corn the last few weeks.
When we were continuing lower throughout the end of August and posting new lows, the funds were buying.
But why were prices going lower if the funds were buying?
Because it was met with farmer selling. A lot of it.
Farmer selling has been significantly reduced now that first notice day is behind us.
So now when the funds cover, there will be no farmer selling to offset their buying. Thus making their buying more influential to price action.
The US has been hot & dry recently which might have trimmed the top off of some yields. The next two weeks offer zero rain. So not quite ideal finish to the crops…
For those interested, in todays market update go over everything from charts to historical harvest lows & more
Can Read Here: https://txt.so/FbtS4s
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Huge day for grains - market comments
