Wheat futures put in a harvest low in June 11 and rallied sharply into Aug. 6. In June, few thought wheat futures had a life. After all, the world had huge carries.
Soybeans started the last week of October with enthusiasm. Twelve-dollar soybeans seems like a high enough price, but is it? Oats, corn and wheat have all made higher highs for the year on a lead contract, but soybeans have not. For soybeans to do so would mean that the November contract would need to take out $12.91¼ that was made in June of last year by the July 2009 contract.
Since this column is being written before the release of USDA’s October supply and demand report, I will write about a market that I have not addressed in some time.
Futures trading for soybeans, corn and wheat was volatile the week of Sept. 27. In fact, October may continue that trend.
The USDA supply and demand numbers were released Sept. 10. While some analysts may feel the surprise was an increase in the soybean numbers (44.7 bushels per acre versus August estimate of 44 bushels per acre), I tend to think that the thought process leaned more in that direction because of higher pod counts expressed by the Pro Farmer Tour.
I am very bullish corn. The outlook of the corn market has the potential of a very good story for 2011.
In about two weeks, farmers in Kansas will start to plant winter wheat. Traders will be watchful of how much the acreage increases in the top producing state in the United States for wheat.
Normally, soybeans would be more prone to put in a bottom in August on a decline from June. This year is different. A low was put in during June to July and a counterseasonal rally has occurred. It has been the consistent demand by China and other world buyers (mostly China) that has floored soybeans.
For wheat futures, “buy the rumor and sell the fact” seems to be the rule. Much talk and news has been released about the ongoing drought in the Ukraine, Russia and Kazakhstan.
Special to Agweek, 08/10/2010
For some time, there has been much discussion about weather and the adverse effects on crop production for major exporters in the world. This has helped grain markets get a much-needed and appreciated rally to relieve oversold conditions and bring interest and life back to ag commodities.
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