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| Soybeans break below $12 and corn posts a new low close as the markets were pressured by technical selling and geopolitics as the idea floating around is that China won’t be buying our beans if Trump is elected.
Then we have the basis in Brazil that continues to drop. There were some beans that traded to US from Brazil. That shows 2 things: the first is that maybe we are too expensive. Second is that we don’t have many beans. Our old crop situation is relatively tight otherwise we wouldn’t be having beans coming in from Brazil.
Weather in South America is a mixed bag. Some hot and dry areas in Argentina while Brazil gets rain. The market is trading a smaller crop than the USDA has but it hasn’t been enough to get business coming to us.
Then there is also a lot of fear that China is going to cancel some US business and switch it over to Brazil.
If we could turn that around and start getting business from China, our markets could get moving but that’s not the case.
The technical situation also looks pretty bearish after today. Soybeans failed to hold $12 and we made a new low for the move which opens the door for more technical selling. I could still see us getting a head fake to the downside as the algos like to take out traders stops and go just below support sometimes.
Corn held the lows but made a new low close.
The wheat charts don’t look awful. We closed well off our lows for the second day in a row. When you leave those tails they look like possible reversal but we haven’t seen any follow through yet. Leaves the possibility for a bounce.
Russias still got a lot of cheap wheat and we haven’t been getting any business.
We are at a key area in the markets. Prior to the covid rally and the war inflated rally. If we take a look at corn, we had spent 2014 to 2019 in a $1.50 range where we usually found the highs at $4.50 and the lows at $3. We are in that old resistance turned new support level. So we are at this stage where if we are going to bounce, now would be the time to do it.
That doesn’t mean the funds can’t continue pushing us lower because they certainly can.
Some support levels I could see us testing are $4.30 for corn and $11.75 for beans.
But with the funds as short as they are and the markets going into the seasonal time period where we typically go higher. I feel like the markets have the stages set to see a little rally…
Listen to the rest of todays audio where we go over everything happening in the markets, grain marketing strategies, who should use courage calls and how to utilize them, what to do if you need to make sales & more
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Market audio comments - beans break $12 and new low close in corn
