Wheat
The wheat markets started out the week by moving sharply higher on spillover support from neighboring grains and the outside markets. Wheat found strength from rallying corn and soybeans, as the row crops are adding premium back into the market on the fear that wet weather will continue to cause harvest delays. The outside markets lent some additional support with the U.S. dollar moving lower for the day. The dollar is important to wheat as it need to attract international buyers to raise the export demand for U.S. wheat in the current situation of plentiful stocks worldwide. Technical buying also set it, with commodity funds buying nearly 4,000 contracts on the Chicago Board of Trade
The Oct. 20 session had wheat continuing its role as a follower as it received spillover pressure from corn and soybeans. Upward movement recently has come from spillover support and technical buying, but, without technical buying and support from neighboring grains, wheat fell lower. The fundamentals remain bearish and will continue to limit upward movement. There is some fresh fundamental concern coming from the fact the soft red wheat seeding is behind schedule. The fact that less soft red wheat could be planted would be considered bullish; however, with so much wheat available worldwide, the affect could be limited.
Midweek wheat finished sharply higher once again being fueled by spillover support from neighboring grains. The outside markets also lent support to the upward movement with crude oil moving higher and the lower U.S. dollar lending significant bullish support. The lower U.S. dollar inspired speculative buying in all commodities during the day's session. Fund buying added additional support as the commodity funds bought another 5,000 contracts on the CBOT.
The wheat markets continued higher Oct. 22 on followthrough buying after they closed ahead of the 100-day moving average Oct. 21. In addition, commodity funds continued to add to the upward momentum with their technical buying. Commodity funds continued to hold a large net short position, which is setting the market up for bouts of short covering such as what was experienced by the market during the day's session. Export sales also were supportive coming in ahead of expectations.
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Corn
To start the week, the corn market opened higher and closed with 13.5-cent gains. The market traded higher overnight and that carried over to start the session. The outside markets also were positive and added support. The crop progress report, that was released this afternoon, stated that only 17 percent of the crop had been harvested compared with a five-year average of 46 percent.
The Oct. 20 corn market opened lower and closed with 1.5-cent losses. The market traded lower as combines started to roll in the Corn Belt. New crop corn started hitting the elevators this week. The outside markets were negative, which added to the downside pressure. On the other hand, wet weather is forecast to return, and that did limit the losses
The corn market opened higher Oct. 21 closed with 12-cent gains. The market traded higher on wet weather and strong outside markets. The dollar was lower and crude oil traded at more than $81 a barrel. Rain returned to the Corn Belt and is expected to remain for the next couple of days, which is delaying harvest, and this added supported to the market. December corn did trade over $4, but stops were hit and the market came off of those highs at the close.
The corn market opened lower Oct. 22, but closed with 6.50-cent gains. The market traded higher on wet weather, which is delaying harvest. The outside markets were not supportive and weighed on the trade for most of the session, but corn still was able to close higher. The export sales report that came out the morning of Oct. 23 was disappointing and bearish to the market.
The corn market was trading unchanged at midsession Oct. 23.
Soybeans broke 20 cents in the matter of minutes at midsession and caused corn to come off their highs. Also, profit taking is taking place before the weekend.
Overall, corn has had a good week, gaining 30 cents. The weather continues to drive the corn as harvest is delayed, with additional support from the outside markets. The market has had a big runup, but the reality is the crop will get harvested and it is estimated to be big. Will there be enough production losses to affect the yield and the market? Will we now see this market go lower as harvest pressure enters back into the picture? Short term, the weather will influence the market on a day-by-day basis. Long term, the path of least resistance is down, especially when you think of the yield estimates of this crop. Also, demand and exports will influence the market once we get through harvest.
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USDA released the weekly export inspection report Oc. 19. The report was seen as bearish to corn. There were 24.6 million bushels of corn reported and that was below the 42.1 million bushels needed to meet USDA's projection of 1.85 billion for 200 to '09. This was below the range of the pre-report estimates of 30 million to 35 million bushels.
Soybeans
Soybeans began the week by closing sharply higher as the market focuses on weather. Weather conditions in the Midwest and Delta are dry at present, but the forecast for wetter weather by mid- to late week has traders adding premium back into the market. Soybeans have been struggling with harvest delays as wet weather has held back progress. This is of concern as there is a need to replenish stocks, which is heightened by the strong export demand. Export inspections are evidence of this demand with this week's report showing higher-than-expected numbers. Some additional support came from speculative buying, which was a feature in all the grains as a result of the lower U.S. dollar and higher equities.
The Oct. 20 session had soybeans closing lower taking back some of the gains from Oct. 19. A large portion of these sales was commodity funds, which accounted for about 5,000 contracts sold on the CBOT. The day was just a typical turnaround Tuesday; however, the market looked to continue moving upward. Rain was expected to stall harvest progress once again, as the Oct. 19 USDA report revealed harvest progress to be at 30 percent complete, compared with the five-year average of 72 percent. The fundamentals also remain bullish, which is providing underlying support for any upward movement.
Soybeans finished sharply higher Oct. 21 on speculative buying, which was fueled by supportive outside markets. With the U.S. dollar moving lower and crude oil moving higher, speculative buying brought all the grains higher. As a result, soybeans futures rallied to seven-week highs. In addition to the speculative buying, traders also were adding additional premium back into the market on the concern over harvest delays. Wet weather is expected to move into the Midwest Oct. 22 and 23, which will delay harvest through the weekend. This is bringing concern that there could be some crop loss the longer the crop stays in the field.
Soybeans fell lower Oct. 22 on the influence of the higher U.S. dollar. The lower U.S. dollar has been stimulating buying interest in commodities recently, but as the dollar moved higher, it applied pressure to all of the commodity markets. In addition, traders hedging applied additional pressure. There was a renewed selling interest in the market after the Oct. 21 rally. Export sales were supportive and are evidence of the strong export demand that has been a bullish fundamental for the market.
Barley
USDA reported no barley export shipments for last week. This brings the year-to-date export shipments pace for barley to 449,000 bushels compared with 818,000 bushels for last year at this time. USDA reported no barley export sales for last week. This brings the year-to-date export sales total for barley to 3.1 million bushels compared with 9.8 million bushels for last year at this time. Cash feed barley bids in Minneapolis increased 5 cents to $2.15. Malt barley bids remain off the board.
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Durum
USDA estimated last week's durum export shipments pace at 1.747 million bushels. The major destinations were Algeria: 536,000 bushels, Italy: 531,000 bushels and Turkey: 680,000 bushels. Last week's durum export sales pace was estimated at 500,000 bushels. This brings the year-to-date export sales total pace for durum to 14.2 million bushels compared with 10.9 million bushels for last year at this time.
The Cass County, N.D., durum loan deficiency payments dropped 14 cents to $1.16. Progressive Ag took the durum loan deficiency payment Oct. 6 at $1.51.
Canola
Canola futures on the Winnipeg, Manitoba, futures exchange closed $4 lower for the week after trading with decent gains all week. By Oct. 21, the canola market was posting $12 gains and appeared to be on a roll. The lack of harvest progress combined with spillover strength from the higher U.S. soybean and energy complexes to help support the canola market. Light support also came from a weaker Canadian dollar, which has helped to encourage light export demand. But all that changed Oct. 22 when the canola market took a $16 hit. The selling was a result of technical pressure as canola traded above the $400 resistance level. This pushed canola into sell stops. Technically, this is not a good close. The Oct. 22 cash canola bids in Velva, N.D., were at $15.72.
Dry beans
The lack of harvest progress and concerns toward the quality of the remaining crop has pushed cash bids this week. Current bids are being offered in the $28 range for pinto beans.
Sunflowers
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The Oct. 22 cash sunflower bids in Fargo, N.D., were at $13.15.
