Grains continue trading very erratically today, with corn and soybeans selling off modestly at the open and trading sideways ever since. Corn is down only a few cents this morning, and soybean prices are only down about 10 cents. Continued drier weather is providing hope that more corn will be planted, even though current crop plantings are only about 1/2 to 1/3 of normal at this date. Corn requires warm soil that is not too moist because it is highly vulnerable to cold and soggy soil conditions.
Wheat is modestly higher and holding its higher prices. I believe we are beginning to see early signs of a potential bottom in wheat on the daily chart (see chart at bottom of this post) despite the slight acceleration to the downside yesterday. The price of wheat has fallen 40% in the past two months, but that doesn't seem to draw much media attention. (If a trader had shorted wheat precisely at the top, that trader would be $25,000 per contract in the profit right now.) The downside acceleration yesterday was somewhat weak compared to the past, and may be suggestive of a consolidation (see the daily chart at the bottom of this post). Given that Australia is having a very good wheat growing season after two years of drought, it is hard to see a significant rise in wheat prices unless weather or yield prospects deteriorate significantly.
Of course weather can always change rapidly, and the situation can shift on a dime. I don't anticipate significant and lasting trend patterns until or unless the summer begins to show signs of either a bumper crop potential or degradation of yields (which can have innumerable causes). The bottom line is that it is just too early to see any long-term patterns developing. We are trading the weather and crop reports almost day by day.
Oftentimes, we will see sell-offs on Fridays as traders liquidate their positions before the weekend. We will then see traders place new trades following the Monday afternoon USDA crop reports, which give us clues to the progress (right now) of seed planting and the impact of weather for the previous week.
Oftentimes, we will see sell-offs on Fridays as traders liquidate their positions before the weekend. We will then see traders place new trades following the Monday afternoon USDA crop reports, which give us clues to the progress (right now) of seed planting and the impact of weather for the previous week.
Corn -- Trading Sideways
Soybeans -- Early Selling, Sideways Trading
Wheat -- Modestly Higher Today
Wheat Daily -- Are We Forming a Bottom?Note the heavy buying in the volume indicator.
