(Inside Futures) – Soybean Futures— The soybean market had one of its worst down weeks in quite some time finishing last Friday at 13.81 coming off a very bullish report which stated that carryover levels are at 150 million bushels propping up prices to contract highs, but this week was a different story as heavy rains came across the Midwest and a general malaise in commodity prices pushing soybeans down $.25 this Friday afternoon at 13.16 finishing down $.65 for the week closing right at 4 week low. I have been talking about the soybeans filling their gap on the daily chart and they finally did fill it in yesterday’s trade, however I do think prices could go all way down 12.80 and at that price level I would start to get bullish as the fundamentals in soybeans are much better than the rest of the grain market. The problem with soybeans is the fact that corn and wheat continue to move lower and they are starting to put some pressure on the soybean complex, however I do think losses are limited but I do see prices heading 30- $.50 lower here in the short term as harvest is beginning which could keep a lid on prices as a 3.23 billion crop is at hand. TREND: LOWER -CHART STRUCTURE: POOR
Informa Economics Estimates: Bean Yield: 42.4 bpa vs. September 5th estimate of 42.7 bpa. Bean Production: 3.224 billion bushels vs. 3.266 on September 5th. Bean Planted Area: 76.8 million acres vs. USDA at 77.2 million.
Corn Futures— Corn futures in the December contract finished down $.08 at 4.51 a bushel hitting a fresh 4 week low as I’ve advising in previous blogs to continue to be short the corn market as a 14 billion crop is on the horizon as harvest is starting to accelerate which will start to put a huge supply of corn onto the market as I do believe the contract low of 4.45 will be broken in next week’s trade with the possibility of $4 rather quickly in my opinion. You must realize how big of a crop is coming in the market in the next 60 days it’s also the largest crop in the history of the United States which in my opinion is going to continue to push prices lower on a daily basis especially if the soybean market starts to turn to the downside.
The United States federal government stated that they will continue stimulus which propped up corn prices the other night, however the fundamentals are so bearish at this time I don’t think it really matters what the government does & I do believe corn prices are headed lower and I think you should be short the futures contract placing a stop loss above the 10 day high which is 4.73 risking around $1,000 per contract or get into some type of option spread limiting your risk to what the premium costs. The chart structure in corn is starting to improve on a daily basis and I think this is a good market for small or large trading accounts. TREND: LOWER -CHART STRUCTURE: EXCELLENT
Informa Economics Estimates: Corn Yield: 157.6 bpa vs. September 5th estimate of 157.2 bpa. Corn Production: 13.889 billion bushels vs. 14.010 on September 5th. Corn Planted Area: 95.8 million acres vs. USDA at 97.38 million.
Wheat Futures–Wheat futures in the December contract continued their seesaw pattern down $.11 after being up $.08 in yesterday’s trade to settle at 6.46 a bushel starting to create major support at 6.40 where it has been trading for the last 5 weeks. If prices break 6.34 I would be recommending a short position as I think the bear markets will continue in the grain market. The wheat market generally becomes more volatile as we enter the winter season and volatility right now is very low so in my opinion whatever direction the breakout occurs could be a substantial rally or a substantial fall from today’s prices so keep an eye on this market. In my opinion wheat could head to the downside so if the 6.34 level is breached I think we could head into the mid-$5 range. Wheat prices are still trading below their 20 and 100 day moving average which is a bearish technical indicator in my opinion & I do believe wheat will start to follow corn to the downside. TREND: SIDEWAYS -CHART STRUCTURE: EXCELLENT
