Harvest delays supporting markets
Wheat Wheat finished sharply higher Oct. 12 rising on spillover support from corn and soybeans. Wheat was in the role of follower as row crops rose on weather concerns and harvest delays. The outside markets also lent support with the U.S. dollar...
Wheat finished sharply higher Oct. 12 rising on spillover support from corn and soybeans. Wheat was in the role of follower as row crops rose on weather concerns and harvest delays. The outside markets also lent support with the U.S. dollar lower and crude oil moving higher. Technical buying also gave the market some additional support, with commodity funds buying more than 2,000 wheat contracts on the Chicago Board of Trade.
Beyond these factors, the fundamental news remains bearish with wheat stocks plentiful worldwide and lack of export demand. Exports have been a negative factor on the market as the marketing year got off to a slow start and has since not been able to hold consistently higher numbers.
Wheat climbed to seven-week highs Oct. 13 on technical buying and short covering. The large net short position by noncommercial speculative funds on the CBOT is positioning the market for short covering. In addition, the fact that the market already has rose to more than the 50-day moving average Oct. 12 is opening the market up to more technical buying. Other than the technical momentum, the outlook remains bearish for wheat. The USDA crop progress and export inspections reports show that spring wheat harvest is completed and that winter wheat progress is running close to the five-year average.
The session started out by moving lower Oct. 14 as traders took profits from recent gains. After the past week of the market moving mostly higher on technical buying and short covering, traders changed direction midweek to take some premium back. On the export front, USDA announced a sale of 6.7 million bushels of hard red wheat to Iraq.
The wheat markets finished lower for the day Oct. 15 as traders took profits on recent trades. The market recently has been higher on technical buying and short covering, which pushed the market to 10-week highs earlier in the week. Traders took back some of those profits with commodity funds providing much of the pressure by selling 3,000 contracts on the CBOT.
To start the week, the corn market traded higher and closed with 18.75 cent gains. Wet weather is delaying harvest and that supported this market higher. The crop still is there and it will get harvested, but the rain is slowing the process down. The outside markets also were positive to support the market higher.
The corn market traded unchanged Oct. 13. Profit taking entered into the market early in the session and then the weather conversation entered back into the trade.
The corn market traded unchanged Oct. 14. The market opened higher, but was unable to hold the gains going into the close. The market traded higher early in the session with the strength in the outside markets and the weather giving the market support.
The corn market opened lower Oct. 15 and closed with 10-cent losses. The market traded lower overnight with the losses from the outside market adding pressure. The outside markets did turn positive as the session went along, but the corn was not able to follow. Profit taking entered into the market and buying interest disappeared.
The corn market was unchanged at midsession Oct. 16. Traders in the corn pit, as well as in the other markets, really don't seem willing to drive the market lower, or take it higher for that matter. Weather still is delaying harvest. Also, outside markets were not supportive and lack of buying interest does not help to push this market higher.
The USDA export inspection report was seen as bearish to corn. There were 20.5 million bushels of corn reported, and that was below the 41.9 million bushels needed to meet USDA's projection of 1.85 billion for 2008 to '09.
Soybeans started the week by finishing Oct. 12 sharply higher on crop concerns because of the recent weather conditions. Recent frost and freezing could have resulted in damage to immature crops development. This is especially of concern this year because of the later planting in the Midwest. In addition, wetter weather is looking to continue to delay harvest progress. The slowed harvest progress is of concern because of the tight stock situation and the need to replenish the empty pipeline. There also is concern about disease issues in the Delta region as a result of this late in the season rain. These factors are having traders add premium back into the market, which is pushing prices sharply higher for the day.
Soybeans finished lower Oct. 13 as traders take back some of Oct. 12 gains. The market rose Oct. 12 on crop concerns after recent wet and cold weather. The market turned around with traders profit taking. In the short-term forecast, wet weather is expected to continue to cause harvest delays and colder weather in the Upper Midwest is going to continue through the week, which could be detrimental to the remaining crop's maturity.
Midweek, the market started higher out of the overnight on speculative buying. However, the upward trend turned around during the day and market changed to profit taking mode. As traders took profits, the market was pushed lower, but still managed to close with slight gains. Concerns about harvest delays and a weaker U.S. dollar pushed the market higher initially. Wet weather has been slowing harvest progress, and with the tight stock situation, traders continue to add premium into the market. The weaker U.S. dollar has traders buying into commodities on inflationary concerns and this is pushing commodities higher across the board.
Soybeans finished the day lower Oct. 15 with traders focusing on the weather forecast. The recent weather forecast points to drier weather in the Midwest, which will open up an opportunity to make harvest progress. Soybeans have been adding premium in the past week because of harvest delays, and once these concerns were removed, the market saw traders turn to profit taking.
USDA estimated last week's export inspections for barley at 12,000 bushels with all of the bushels going to China. There were no barley export sales reported for last week. This brings the year-to-date export sales total for barley to 3.1 million bushels compared with 8.4 million bushels for last year at this time. Cash feed barley bids in Minneapolis increased 10 cents this week to end at $2.10. Malt barley bids remain off the board.
USDA's export shipments report put last week's durum shipments at 1.059 million bushels with all of the bushels going to Morocco. Last week's durum export sales pace was estimated at 2.2 million bushels. This brings durum's export sales pace for the year to 14.9 million bushels compared with 10.7 million bushels for last year at this time. As of Oct. 11, 95 percent of North Dakota's durum crop was harvested compared with 93 percent for last week and 99 percent for the five-year average. Durum loan deficiency payments dropped 10 cents to $1.28 in Cass County, N.D. Progressive Ag took the durum loan deficiency payments Oct. 6 at $1.51.
Canola futures on the Winnipeg, Manitoba, futures exchange closed higher for the week. Most of the strength was a result of spillover strength from a higher U.S. soybean complex as well as from a stronger U.S. energy complex. The canola market had to play catchup Oct. 13 as the Canadian market were closed Oct. 12 in observance of the Canadian Thanksgiving Holiday. Adding support was slow harvest progress in Canada. Late in the week, gains were limited by spillover selling from the U.S. soybean complex as profit taking and technical selling pressure hit the soybeans. Cash canola bids Oct. 15 in Velva, N.D., were at $15.62. As of Oct. 11, 95 percent of North Dakota's canola crop was harvested compared with 94 percent for last week and 99 percent for the five-year average.
Current crop condition ratings and crop progress for the major dry bean-producing states are North Dakota: 45 percent is harvested, compared with 41 percent last week and 82 percent for five-year average; Michigan: 40 percent good-excellent, 33 percent fair and 27 percent poor-very poor, off 8 percent from last week, 67 percent is harvested, compared with 57 percent last week and 87 percent for the five-year average; Minnesota: 82 percent harvested, compared with 70 percent last week and 87 percent for the five-year average; Nebraska: 91 percent harvested, compared with 84 percent last week and 81 percent for the five-year average; Colorado: 69 percent harvested, compared with 60 percent last week and 74 percent for the five-year average; and Indiana: 97 percent harvested, compared with 94 percent last week and 97 percent for the five-year average.
As of Oct 11, 7 percent of the nations sunflower crop was harvested compared with 5 percent for last week and 14 percent for the five-year average. North Dakota's sunflower crop condition rating improved 2 percent to 79 percent good-excellent, 19 percent fair and 2 percent poor-very poor. Minnesota's sunflower crop condition rating improved 2 percent to 57 percent good-excellent, 34 percent fair and 9 percent poor-very poor. Cash sunflower bids in Fargo, N.D., improved 10 cents to end at $12.90.