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Major markets start high, finish low

Wheat Wheat moved higher Nov. 2 on spillover support from neighboring grains. The lower U.S. dollar supported the upward movement, as a lower U.S. dollar makes U.S. commodities more attractive to foreign buyers. This is important for wheat, becau...

Wheat

Wheat moved higher Nov. 2 on spillover support from neighboring grains. The lower U.S. dollar supported the upward movement, as a lower U.S. dollar makes U.S. commodities more attractive to foreign buyers. This is important for wheat, because exports started out slow in the 2009 to '10 marketing year. Export inspection numbers were disappointing and added to the need to pick up export demand to bring prices higher. The bearish fundamentals are an underlying pressure and continue to weigh on gains.

The Nov. 3 session had wheat slightly lower to unchanged on a lack of fresh news. The market didn't have any fresh driving force news to give it direction so the path of least resistance was the direction it took. Some thoughts were that the rally from Nov. 2 was overdone. Some traders were hanging back out of the market with concerns that funds could bring prices higher yet. Commodity funds have had a large presence in the market, resulting in rallies on technical buying and short covering. Outside of that, the markets are focusing on the fundamentals which remain bearish. Concerns regarding late planting of winter wheat have been seen as a possibility for some bullish movement, though the actual affect on the market has been minimal because of the large supplies.

Wheat finished midweek higher on upward momentum from commodity funds. Technical buying pushed wheat higher after Nov. 3's lower close, with commodity funds buying an estimated 2,000 contracts on the Chicago Board of Trade. Wheat also was supported by the outside markets, with the U.S. dollar moving lower for the day. The fundamentals remain bearish, and Nov. 4 is just another example of the ability of funds to direct the market.

The wheat markets moved lower Nov. 5 on bearish spillover from corn and soybeans. Outside of neighboring markets it was a quiet news day, which has wheat focusing on the bearish fundamentals. Wheat needs to secure more export demand, and despite the lower U.S. dollar recently, export sales the morning of Nov. 5 were disappointing.

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Corn

To start the week, the corn market opened higher and closed with 14.75-cent gains. The market traded higher with the strength in the outside markets. Also, the overnight session was higher and that carried over to help start the day. The market then traded close to unchanged after the higher open and made a run at the end from fund buying. We will see if there are any issues with quality when the combines start rolling. USDA's export inspection report was bearish and that limited midsession movement.

The corn market opened lower Nov. 3, but closed with 7.25-cent gains. The market traded higher with strength in the outside markets. Fundamentally, there was no news to take the market higher, but fund buying stepped in and was the main supporting factor.

The corn market opened steady to slightly higher Nov. 4, but rallied to test the old recent highs. At this level, the market ran into sell stops, which forced the corn to slip going into the close. By the close, the corn market was posting 5- to 6-cent losses. The market started the session higher with the strength in the outside markets combining with recent concerns toward the quality of this year corn crop. But once the corn market tested the old recent high of $4, sell stops set in to push the corn market lower.

The corn market opened the session Nov. 5 steady to slightly lower and traded that way throughout most of the session. It appeared that the corn market was going to be the only market that could hold onto any strength. That was until the last few minutes of the session. With about 15 minutes left in the session, the weakness in the soybean complex spilled over into the corn market, forcing it to end with 7-cent losses. Early session losses were being trimmed by a slightly slower harvest progress for corn as many producers concentrate on getting the soybeans out of the fields.

The corn market was down 7 cents at midsession Nov. 6. The forecast again was changed for warm and dry weather for most of the country for the next 14 days. Crude oil also was down hard to add additional pressure. Corn gained 3 cents compared with the Oct. 30 close. The outside markets have influenced the corn market, but not as much as the weather.

Soybeans

To start the week, soybeans finished higher on supportive outside markets, with a lower U.S. dollar and higher crude oil. The market is focused on the bullish outside markets in the absence of fresh fundamental news. Upward movement in limited, however, because of expected favorable weather. Export inspections also were supportive, which is just further evidence of the strong export demand for U.S. soybeans.

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Soybeans closed higher once again Nov. 3 as traders eye weather conditions. Crop concerns in the Delta, which has experienced a lot of heavy rains and flooding, is buoying prices. While favorable weather is resulting in less premium being put into the market, there still are problem areas and the market seems to be holding its breath until harvest is complete. The underlying fundamentals are supportive, with the need to replenish dwindling stocks and strong export demand for U.S. soybeans. In addition, the outside markets were supportive with a lower U.S. dollar and higher crude oil.

Soybeans turned around Nov. 4 with the market finishing lower as traders took profits. A large part of this bearish momentum came from commodity funds that were buying in wheat and selling the row crops. After a couple of days of gains, traders decided to remove some premium from the market. The weather forecast also is a source of pressure, with dry conditions expected in the Corn Belt. Despite the lower close, the fundamentals remain supportive because of the urgent need to replenish supplies.

The market closed sharply lower Nov. 5 as traders focused on harvest progress. Weather conditions in the Midwest looked to be favorable for harvest progress, which has traders removing premium from the market. Additionally, upside progress recently has come from speculative buying, which was not a supportive feature in the market Nov. 5. Without the speculative momentum, the market fell back with speculators taking profits. Despite the lower close, export sales were bullish and within expectations.

Barley

USDA estimated last week's barley export shipments pace at 20,000 bushels with 12,000 bushels going to China, while 8,000 bushels were for Mexico. This brings the year-to-date export shipments total for barley to 224,000 bushels compared with 866.000 bushels for last year at this time. USDA reported no barley exports for last week. This brings the year-to-date export sales pace for barley to 3.1 million bushels compared with 9.8 million bushels for last year at this time.

Durum

USDA estimated last week's durum export shipments pace at 884,000 bushels with most of the shipments going to the Netherlands (826,000 bushels). Last week's durum export sales pace was estimated at 900,000 bushels. This brings the year-to-date export sales pace for durum to 29 million bushels compared with 11.3 million bushels for last year at this time. The durum loan deficiency payment for Cass County, N.D., dropped 1 cent to 99 cents. Progressive Ag took the durum loan deficiency payment Oct. 6 at $1.51.

Canola

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Canola futures on the Winnipeg, Manitoba, futures exchange closed $7.50 lower for the week ending Nov. 5. The canola market started the week off higher with modest strength coming from an improving demand outlook. But by midweek, the canola market hit a road block, and it was mainly a result of carry-over selling from a sharply lower U.S. soybean complex. Improving weather conditions also added selling pressure, as it now appears that producers will be able to get the rest of the canola harvested. The November contract, which is in delivery, ended with modest gains and above the $400 resistance level. Canola cash bids in Velva, N.D., were off 14 cents Nov. 5 to $16.04.

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; Minnesota: 88 percent harvested compared with 87 percent last week and 99 percent for the five-year average; Nebraska: 93 percent harvested compared with 92 percent last week and 96 percent for the five-year average; Colorado: 88 percent harvested compared with 81 percent last week and 89 percent for the five-year average; Idaho: harvest complete; and Michigan: 43 percent good to excellent, 30 percent fair and 27 percent poor to very poor, an increase of 3 percent from last week, 89 percent is harvested compared with 79 percent last week and 97 percent for the five-year average. Cash bids have been steadily increasing the past few weeks because of the delay in harvest activity and from concerns about the quality of the crop left to harvest. Producers should hold off on pricing anymore dry edible beans.

Sunflowers

As of Nov. 1, 15 percent of the nation's sunflower crop was harvested compared with 12 percent for last week and 57 percent for the five-year average. North Dakota's sunflower crop condition rating remained unchanged at 78 percent good to excellent, 21 percent fair and 1 percent poor to very poor. Minnesota's sunflower crop condition rating dropped 3 percent to 51 percent good to excellent, 35 percent fair and 14 percent poor to very poor. USDA put last week's soybean oil export sales pace at 6,900 metric tons. This brings the year-to-date export sales pace for soybean oil to 647,600 metric tons compared with 172,600 metric tons. Cash sunflower bids in Fargo, N.D., on Nov. 5 were $13.10.

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