Corn Can't Hold its 1-month High?

Corn: September Corn settled down 5 cents at $3.60. New crop CZ settled down 5 ½ cents at $3.71 ½. September opened higher in the overnight session and moved to a one month high print at $3.70. This partially filled the gap going back to the July 18th low at 3.70 ¾. When the pit opened up, the market tested that level one more time and then headed south for the rest of the day. This move appeared to be fueled by funds buying beans and selling corn. December corn followed in suit with Sep, as the market fought to a new 1-month high at $3.81, but then also trended lower for the rest of the day. Weekly export inspections last week were 38.2 million bushels. The Pro Farm Tour began this week and will be updating their findings as they move across the Corn Belt. The extended forecast remained non-threatening with no call for a hard frost for the bulls. Crop conditions dropped 1% to 72% good to excellent. Support on the daily charts for CZ comes below at $3.66 and then $3.58. Resistance above at comes at $3.81, $3.89 and then $3.95 ¾. Hedgers: September dated options expire Friday.

Wheat: September Chicago wheat fell 8 ¾ to settle at $5.42 1/2. Wheat posted its high on the opening bell of Sunday night’s electronic trade at $5.51 ½. When the pit opened up at 8:30AM, trade was surprisingly subdued, as we only had a 7 cent trading range all afternoon. Traders seemed content to grind around $5.45 which is the ½ way point of the recent 53 cent move that wheat enjoyed between its contract low at $5.18 ¾ and its 6-week high at $5.72 posted on August 6th. Spring wheat condition report saw a 2% drop from last week’s 70% good to excellent to today’s 68%. Last week’s exports showed 21.9 Million bushels. US wheat is still overpriced compared to other worldwide competitors and our exports continue to suffer. Hedgers: Re-own at least half of any sales you are making off the combine and maintain put protection on bushels you are intending to store.

Soybeans: September beans were the one bright spot for the bulls today, gaining 13 cents to settle at $11.15 ½ which is the highest settlement in 2 ½ weeks. November new crop beans settled up 5 ¾ cents. September continued to benefit from bull spreading, as the Sep/Nov spread settled at 57 ¾ which is a 3-month high. That spread had gained 42 cents in the past 3 weeks of trade, The August future’s expiration has shifted the short squeeze in the cash market to September. Most analysts expect this spread to stay bid for at least another 10 trading days until beans come on line from the southern USA. For now, take advantage of the fact its pulling up new crop as well. Barring an unforeseen hard frost, this is probably one of the last legitimate bull fundamental issues on our plate. Funds bought 3,000 contracts today, but came in short an estimated 26,000 contracts. Technically, November has resistance above at $10.69, $10.76 ½ and then $10.89 ¼. Below, support comes at $10.38 ¾ which is the contract low posted last Thursday. Hedgers: September dated options expire on Friday. Make sure you extend downside protection on un priced bushels.

The rumors from the Ukraine last Friday turned out to be unsubstantiated but the market will most likely remain sensitive to any reports of escalation. These knee jerk rallies have given producers several very short lived spikes in the cash market. It might be wise to have some orders resting higher above for cash sales with your elevator in case the spike comes overnight or only lasts for several hours.

The stock market rebounded today to within 100 points of its recent record high in the Dow and within 15 points of the recent record high for the S&P futures contract as well. The Nasdaq index had its highest tick in 14 years! Crude oil fell on decreased tension in the mid-east, while the US dollar remained within spitting distance of its 10-month high posted last Thursday. Finally, the yield on the 10-year note is near its lowest point in the last 14 months posted last Friday.