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Grains slip on improving forecast

Wheat The wheat market started the week lower on follow-through selling after Oct. 23's lower close. The market has been trending higher with most of the support coming from technical buying. The past three weeks of gains has been enough to resul...

Wheat

The wheat market started the week lower on follow-through selling after Oct. 23's lower close. The market has been trending higher with most of the support coming from technical buying. The past three weeks of gains has been enough to result in the market to come under pressure from profit taking, which was experienced in the Oct. 26 session. A lot of the activity in the market is coming from commodity funds, which sold 6,000 contracts on the Chicago Board of Trade. Adding to the lower trend were the outside markets, as the U.S. dollar finished higher. Also adding pressure was a bearish export inspection report, which came in lower than expected.

Wheat finished lower Oct. 27 again on profit-taking pressure. The market had been moving higher the past few weeks on technical buying and spillover support from the other grains (not to mention the outside markets), however, without the help of commodity funds short covering and with the other grains also trading lower, it is tough for the wheat market not to join in. There is simply a lack of fundamental news to keep wheat moving higher. Wheat remains plentiful globally, and with harvest wrapped up in the U.S., there isn't a fundamental reason for wheat to keep move higher. In fact, there is only one positive fundamental news item that could support wheat, slow planting progress for winter wheat. Some support in the past week has come from concerns over soft red winter wheat planting being behind schedule because of wet weather. However, with drier weather in the forecast, some of that premium is getting removed from the market.

The losses in the wheat market continued during midweek as traders take premium out of the market. The lack of fresh supportive news to help the market hold onto gains has pressured the wheat for most of the week. Spillover pressure from neighboring grains and a stronger U.S. dollar is adding additional pressure. The bearish fundamentals are dragging prices lower, in the absence of fresh news, and the situation looks as if will hold in this pattern unless the market receives some fresh bullish fundamentals or is able to move higher on supportive news, which has been hard to come by.

The Oct. 28 session had wheat finishing higher on supportive outside markets. The U.S. dollar finished lower and the equities had a strong close and that helped add strength to the wheat. This trend was consistent with all of the commodities, and spillover support from neighboring grains helped the friendly trend in the wheat market. The market is focusing on outside markets in the lack of fresh fundamental news.

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As of Oct. 25, USDA estimated winter wheat planting to be at 76 percent completed, compared with 69 percent from last week and 85 percent for the five-year average. Winter wheat percent emerged is at 59 percent compared with 48 percent from last week and the five-year average of 66 percent.

Corn

To start the week, the corn market opened higher but closed with 19.75-cent losses. The market traded lower from profit taking and an improved weather forecast Outside markets were not supportive and that weighed on the market. Also, USDA export inspection report was bearish to corn.

The Oct. 27 session had the corn market open lower, closing with 7.25-cent losses. The market traded lower from profit taking and an improved weather forecast. Also, the outside markets were not supportive, which weighed on the market. There was no positive news to take the market higher and buying interest was minimal

The corn market opened lower and closed with 1.50-cent losses. The market traded lower with follow-through losses from the overnight trade and a favorable extended forecast. We will have rain through the rest of the week for the Corn Belt, but it is expected to be drier starting in November. This should allow harvest to continue. The outside markets continue to be unsupportive to the grains and that weighed on the market. Also, buying interest has dissipated, and there is pressure from funds liquidating their long positions.

The corn market opened higher Oct. 29 and closed with 11.75-cent gains. The market traded higher with the strength in the outside markets and the rain that is falling throughout the country. The overnight session was higher, and that carried over to start the session. Crude and the Dow Jones Industrial Average were much higher and the dollar was lower to support the market.

The corn market was down 12 cents at midsession Oct. 30. We have been down every day since Oct. 26, with the exception of Oct. 29, and those gains are being given back.

Corn lost 28 cents for the week compared with Oct. 23's close. The outside markets have influenced the corn market, but not as much as the weather. We had wet weather forecast for much of the country, and that did materialize, but the weather for the first 15 days of November is for warm temperatures and dry conditions. This extended forecast has put pressure on the market and should carry over to the week of Nov. 2 when the combines start rolling.

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Soybeans

Soybeans started the week off closing lower as the market received news of a clearer forecast for the Midwest starting next week. Weather conditions in the Midwest are expected to clear up, allowing for harvest to make much needed progress. In addition, a stronger U.S. dollar applied pressure to commodities in the Oct. 26 session. While the market is falling on the promise of harvest progress, there still is support for prices as export demand remains strong and the wet weather in the forecast for the rest of the week are also providing some underlying support. In other news, planting progress is underway in the Southern Hemisphere, and there also is talk that current harvest progress has been enough to supply immediate demand.

Soybeans finished lower again Oct. 27 as traders continue to keep their eyes on the weather forecast and the lack of fresh fundamental news. Weather conditions, which have delayed harvest progress and led to concerns over the 2009 crop, are expected to be favorable. Current harvest progress is thought to have been enough to fill immediate demand needs, however, there still is an urgent need to replenish stocks.

Midweek, soybeans finished lower as traders continue to focus on the prospect of harvest progress in the next week. Favorable weather conditions have the market convinced that harvest progress will pick up in the next several days and, thus, we can remove the premium in the market and turn to the typical seasonal harvest pressure. In addition, the U.S. dollar finished stronger adding pressure to all commodities. Also there is some end-of-the-month positioning going on as traders are looking at the end of the week, also the end of the month, as a time to remove positions.

Soybeans finished higher on outside market strength Oct. 29, with a lower U.S. dollar and higher equities, adding strength to commodities. In addition, concerns regarding disease and quality loss in the Delta after a period of heavy rains is having traders add premium back into the market. Also. this is a reminder that while harvest could make good progress in the next week, there is an immediate need to replenish dwindling supplies.

Barley

USDA reported no barley shipments for last week. This brings the year-to-date export shipments pace for barley to 224,000 bushels compared with 818,000 bushels for last year at this time.

Durum

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USDA estimated last week's durum export shipments pace at 2.185 million bushels. The major destinations for durum this past week were Italy and Morocco. Last week's durum's export sales pace was estimated at a negative 100,000 bushels, as it appears the Italy canceled a previous purchase. This brings the year-to-date export sales pace for durum to 28.1 million bushels compared with 10.9 million bushels for last year at this time.

The Cass County, N.D., durum loan deficiency payment dropped 14 cents to now be at $1.02. Progressive Ag took the durum loan deficiency payment Oct. 6 at $1.51.

Canola

Canola futures on the Winnipeg, Manitoba, futures exchange closed higher for the week with most of the contracts months ending with more than $11 (Canadian) gains. The canola market virtually ignored the U.S. soybean and energy complexes as it traded on its own fundamental news for most of the week. The U.S. soybean and energy complex was under pressure for most of the week, while gains were not always large in the canola pit, they were consistent. Supporting the canola market was a weak Canadian dollar, new export demand from Japan and Mexico, slow farmer selling and an overall friendly feeling to the vegetable oil market. Gains were kept in check by a lower U.S. soybean complex.

Dry beans

Current crop condition ratings and crop progress for the major dry bean producing states: North Dakota: 54 percent is harvested compared with 50 percent last week and 93 percent for five-year average; and Minnesota: 88 percent harvested compared with 87 percent last week and 99 percent for the five-year average.

Sunflowers

As of Oct. 25, 12 percent of the nations sunflower crop has been harvested compared with 9 percent last week and 395 for the five-year average.

The Oct. 29 cash sunflower bids in Fargo, N.D., were $13.10.

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