Written by Chris Robinson
Corn: March corn settled up 2 ¼ cents at 7.54 ¾. CH posted its high at 7:30 AM but then leaked lower all day, breaking 15 cents from its highs. A 5 cent rally in the last 3 minutes saved the corn from a lousy performance. Export inspections had been expected to be 23-26 million bushels. The actual number was a disappointing 9.626 million bushels. New crop CZ13 settled up 4 ¼ cents at 6.39 ¾. New crop continues to run into resistance at this 6.40 to 6.45 level for the past 8-weeks. Resistance for CZ13 comes at 6.43, 6.50 and then the contract high posted September 4th at 6.65. Support comes below at 6.00 ¾ which is the 5-month low we tested just 10 trading days ago on November 16th. For March corn, resistance comes above at 7.75 ¾, 7.93 and then 8.00. Support for CH comes at 7.14 and 7.08 ¾ which is the September 28th 5 month low. Hedgers: No change in recommendations. Stay balanced in your hedges.
Wheat: March wheat settled down 2 ¾ cents at 8.60 ¾. New crop WN13 settled down 1 ¾ cents at 8.68 3/4. Export inspections had been expected to be 17-21 Mil bushels. The actual number was lighter and bearish at just 14.186 Mil bushels. Initially Sunday night, WH rallied on the sale to Egypt over the weekend. The sale of 3 cargos was the first of the season. The fact that US wheat is now competitive with the rest of the world should be supportive. It looks like the FSU might finally be finished with wheat exports for 2012. It seems strange that the wheat could not hold onto gains in the wake of bullish export news from Egypt, along with weather worries in the US as well as Russia. WH dropped 17 cents from its high today at 8.77 ¼; a fact which should give perma-bulls pause. Technically, WH is within 15 cents of the November 16th 5-month low we posted just 10 trading days ago. For now, WH remains stuck in its 50 cent trading range with support at 8.50 and resistance at 9.00. Eventually when we break out to the upside or down to lower prices, the move could be significant. Hedgers: No changes in recommendations. Stay balanced in your hedges.
Soybeans: SF settled up 15 cents at 14.53 3/4 which is the highest settlement in 3-weeks. SF posted its lows early Sunday night down at 14.42; had a nice 20 cent rally and finished the day in the middle of its trading range. Exports had been expected at 55-62 million bushels. The actual number came in light as well at just 51.082 million bushels. Beans looked to have definitely gotten oversold during the $2.00 liquidation we saw between November 1st high at 15.71 ½ and the November 16th 5- month low down at 13.72 ¼. SF has now clawed back 90 cents of that $2.00 break. New crop 2013 has rallied back 65 of its 97 cent sell off over the same time frame. Hedgers: No changes in recommendations. If you were nervous 90 cents ago, take advantage of this rally to get protection in place. Stay balanced.
The trade Sunday night saw a calm, but higher opening on the news of the Egypt wheat purchase. The initial rallies were short lived across the board. The corn was initially pulled up with the wheat. However, once the export inspections were released, the party was over. The wheat looked particularly suspicious in its failure to hold new highs. If we are going to have a demand driven market, we need to see stronger exports. We just lived through a weather/ supply driven market in 2012. We can’t afford to be like the generals planning to fight based on the last war. Simply assuming we’ll have another drought in 2013 could backfire. If that’s your marketing plan, and the rains come, you could be caught holding the bag. We are not suggesting that grains can’t go higher and possibly sharply higher. We want to use the options to protect your business risk. That way, the markets can break and rally as much as they want and you retain the flexibility to sell your grain when YOU want to sell it. Not when your banker or your margin clerk forces you to sell it. We are here to help you manage risk, not add to your risk
CER