Wheat
The wheat market started the week off sluggish with most of the early market activity focused on technical influences. Once the other grains were able to recover and trade with decent strength, the traders in the wheat pit reluctantly seemed to go along with the rally and turned to be buyers. Fundamentally, wheat does not have many favorable issues on its side. The winter wheat crop is going in the ground in very good shape and with the recent rains; the wheat is sitting in very good shape (which is reflected in the crop condition rating). Also adding concern is the rallying dollar which closed at or near 90, a level not seen in years.
Session started the Oct. 28 session off higher with much of the early support coming from spillover buying support from the other grains. Both corn and soybeans started the session off sharply higher because of a surprisingly friendly revision in the October U.S. Department of Agriculture crop production report. Once wheat traded sharply higher, the early session buyers turned to be sellers and that forced the wheat market off of the session highs and propelled the market into negative territory. Additional pressure also was a result of the strong start that the winter wheat crop has seen. Planting progress and emergence rates are running at a decent pace and with Oct. 27 crop condition ratings report showing the wheat rated at such a high level, it appears that the 2009 wheat crop is off to a good start. Kansas' crop declined slightly, mostly because of heavy rains, but the crop still is rated more than 70 percent good/excellent, and that is not a bad spot to be in going into the winter.
The session started Oct. 29 sharply higher. Early support was a result of carry-over buying from a stronger overnight session and also from spillover strength from the sharply higher other grains. As mentioned previously, fundamentally, wheat does not have anything to trade off of, but technically, there is a reason for a recovery. Light support was a result of a slightly lower session in the dollar. The dollar struggled Oct. 31 as it waits to see what the Federal Reserve is going to do with interest rates. The federal government cut the interest rates 0.5 percent, which was about as expected. It did nothing for the market at first, but by the time the dollar's session closed, it was posting the single largest one-day decline in more than 23 years.
The wheat market started session lower Oct. 30 with most of the early selling tied to pressure from the overnight session as well as from USDA's bearish export sales report. The overnight session Oct. 29 had wheat starting the session higher, but the gains disappeared as the session proceeded. By the opening of the day session, traders had turned bearish and the disappointing export sales report fed the selling frenzy. The selling was a product of traders who thought Oct. 29 gains were overdone as well as from fund selling, or maybe the lack of carry-through buying from the funds as they turned from being Oct. 29 buyers to be Oct. 30 sellers.
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Basis levels are starting to improve, and with the December Minneapolis wheat contract holding a premium to March, producers who have good-quality wheat should be looking at selling cash wheat now and if you still want ownership, buy calls.
Cash bids Oct. 30 in Minneapolis for 14 percent protein wheat were off 10.5 to 15.5 cents to end in a range between $7.45 and $7.50.
USDA put wheat export inspections estimate at 21.9 million bushels. This compared with 18.8 million bushels for last week and 31.9 million bushels for last year. This brings the year-to-date wheat shipments total to 522.9 million bushels compared with 588.1 million bushels for last year at this time. Last week's export sales pace was estimated at a disappointing 16.9 million bushels for old crop wheat and 1.3 million bushels for new crop 2009, for a total wheat export sales pace of 18.2 million bushels. To date, wheat's export sales pace is at 692.5 million bushels compared with 976.3 million bushels for last year at this time.
As of Oct. 26, 84 percent of the nation's winter wheat had been planted. This compares with 79 percent for last week and 88 percent for the five-year average. Winter wheat emergence is estimated at 69 percent compared with 60 percent for last week and 69 percent for the five-year average. Winter wheat crop conditions are rated at 65 percent good/excellent, 30 percent fair and 5 percent poor/very poor. This compares with last year's rating of 55 percent good/excellent, 33 percent fair and 12 percent poor/very poor.
Corn
Corn closed slightly higher with moderate gains. The bounce in the market was driven by outside markets that push commodities prices up. Outside markets have been able to contribute to corn prices. Crude oil was trading higher and the U.S. dollar held its strength. The biggest factor is the improvement of the stock market that we saw before the close.
Corn finished the trading day Oct. 28 higher in the wake of USDA releasing lower acreage numbers for corn Oct. 28 morning and lower average yield projections. These numbers were released without a typical survey of farmers. That was enough to keep buying interest higher, and it kept the corn prices higher throughout the trading day. Corn harvest is well behind last year and with recent numerous rains corn harvest has been on hold for many farmers but a favorable forecast for the week will help to dry up many fields.
Corn finished up the limit by midweek. Corn was influenced in the early trading day by a sharply lower dollar and sharply higher crude oil prices. The outside market was huge with the Federal Reserve cut the interest rate sending markets sharply higher. The major drop in the dollar sparked a major short covering effort.
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During morning trade Oct. 30, corn open lower after a late selloff in the overnight session. Mixed selling continued to push the corn market sharply lower into midsession. Corn harvest continues to struggle as fields continue to dry up. As fields dry up, producers are hoping that the corn does the same. Corn still is wet coming off the field that has to be dried down for optimal pricing. The Federal Reserve delivered another cut to the interest rates devaluing our dollar causing the spike in prices. The spike was short lived and the dollar still is doing very well. The market showed some weakness Oct. 31 by closing down.
Soybeans
Soybeans closed sharply higher, keeping the market from reaching new lows. As the stock market gains, we could expect the soybean market to come back as well. Outside factors have been a big player in the markets. With mixed signal from crude oil and the U.S. dollar the stock market has been able to send prices up. As we moved closer to the close, the stock market started to drop, but price still kept strong to end the session in the soybean market.
After starting the trading day Oct. 28 sharply higher, soybeans ended the day on the lower side. Anticipation of USDA's report fuels higher prices at the beginning of the day and sharply higher prices in the overnight trade. Funds were said to be on both sides of the market buying into midsession in the soybeans and continuing until the end of the trading day. Soybean harvested acreage was down 1.1 million acres but the yield did not go down in USDA's report.
Soybeans were up limit thorough the trading day by midweek with many outside influences. With the dollar down more than 200 points at midday and crude oil sharply higher, the soybean market had many positive influences during the trading day. There were not huge numbers of buyers in the beans, so they stayed near limit up nearly the entire day.
Soybeans finished slightly lower in the trading session Oct. 30 with the November contract finishing lower. A pullback by traders was evident from the previous days trading as a big rally in the commodities market. There was enough buying interest in the soybean market to keep the price dipping in and out of positive territory.
Barley
USDA reported no barley shipments. This brings the year-to-date total shipments pace for barley to 7.5 million bushels compared with 14.1 million bushels for last year at this time. In addition, no barley exports sales were reported. This brings the year-to-date export sales pace for barley to 9.8 million bushels compared with last year's pace of 39.7 million bushels. USDA is estimating barley exports for the year to be 25 million bushels. There are a few reason why this year's export pace has been sluggish at best. One, and probably the most important factor, is that the U.S. dollar is significantly higher. And two, most of the countries that were buyers of U.S. barley last year experienced poor production years last year but not this year. Cash barley bids in Minneapolis for feed barley improved 15 cents Oct. 30 to be at $3.15.
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Durum
USDA estimated no durum shipments or sales. This brings the year-to-date export sales pace for durum to 10.9 million bushels compared with 31.9 million bushels for last year at this time.
Canola
The Winnipeg, Manitoba, canola futures market closed lower. Canola was under major selling pressure from concerns toward the world economic markets. Additional selling spilled over from the U.S. soybean complex. It appeared that canola was trying to distance itself from the U.S. soybean complex, but the canola market did have negative news of its own to pressure the market, but the lack of demand and a stronger Canadian dollar being the two most often listed.
Sunflower
As of Oct. 26, 22 percent of the nation's sunflower crop was harvested compared with 13 percent for last week at this time and 53 percent for the five-year average. Only Colorado is keeping pace with harvest progress while all of the other major producing states are running 2 percent to 30 percent behind the average five-year pace.
