If I didn't know better, I would think there was an ape conducting a symphony in front of the soybean trading pit and the traders were taking their cues from him as well. Sharply lower Oct. 30, sharply higher Oct. 31, sharply lower Nov. 1 and back up nicely Nov. 2. A trader's delight if swaying the right way.
Enough said. It is November, and what can we expect from the corn and soybeans?
Corn
December corn futures exceeded the September lows in October and then closed higher at the end of the month. So, it should be favorable for December corn to make new monthly highs in November and that was seen Nov. 2. The 380-390 area is going to be a bit tough, but, I look for a good test of the 390 September highs.
Many a bear is starting to mellow, and think that maybe corn does have some reasons to maybe test the $3.90 to $4 level. As was always my opinion since mid-August, a test of $4 would not be a surprise.
ADVERTISEMENT
However, I still believe that corn is a sideways to higher market into expiration on the December contract. Now that a major portion of the U.S. corn crop is harvested, traders should anticipate a potential seasonal lift. Fundamentally, the driving force will be good exports and, continued expectation for yields to decline.
FC Stone's estimate of 153.8 bushels per acre was anticipated reduction. However, it was Informa's estimate that stimulated the buying best with its estimate at 153.3 bushels per acre and down five bushels from its latest estimate. Last year, USDA lowered its yields in October from September by 1.2 bushels per acre. It did a similar thing again this year, and I suspect a lower yield will be shown again Nov. 9. I think USDA will leave the demand/usage side alone and let the trade have time to determine the accuracy of USDA. Quite honestly, I think the final numbers in January will be lower again but, still above last year (149.1 last year).
This coming week, early sell-offs should lead to shortcovering in front of the report as shorts may be unwilling to go into the report.
Soybeans
Soybeans have gratified my opinion and we need to be watchful. It would not surprise me to see a high by November's expiration. Incidently, November soybeans closed above $10 for the first time in history at the end of a week. All-time high is $10.46.
The bean market has some of the best potential of all grain markets if the right shoes drop. For now, I recommend selling 40 percent of your cash soybeans. And more sales might be recommended if we get more strength in the next two weeks.
Now is the time to think of rewarding yourself and, I would look at January prices as they may pay your storage plus.
I apologize for being brief this week and will extend comments more next week after the report.
ADVERTISEMENT
