Corn: CZ settled down 2 ½ cents at a 1-month low settlement of $4.54. CZ also posted a one month low at 4.53 ¼. Corn rallied in the overnight session on the 5AM release of the FSA numbers but rejected that action, trending lower the rest of the day. The FSA report came in at 3.573 million acres, increasing 162K acres from August’s estimate at 3.411 million acres. Planted and failed corn acres were at 91.428, increasing 2.657 million from August’s estimate at 88.771 million acres. CZ posted a high at 4.68 ½, then slid 13 ¼ cents to a fresh 1-month low at 4.53 ¼ on the charts. CZ completed an outside-day-down today. Technical traders consider this a bearish development. The 3 year low down at 4.45 ¾, posted on August 13th remains a target for the bears. The bulls have to be scratching their heads after CZ once again rejected a bullish fundamental report, after first spiking higher off the release. Hedgers: October puts expire Friday.
Wheat: WZ settled up 1 ¾ cents at $6.43. WZ continues to shadow the corn and has been unable to display any independent price action. Harvest continues to be met with no major issues either bullish or bearish to speak of. The recent rains in the southern Great Plains have prepared the ground for SRW planting. WZ on the charts continues to fight to build a base down here against the $6.38- 6.35 ½ level. WZ posted its contract low on August 14th and has been mired in a 40 cent trading range since then. A settlement above $6.65 could spark a short covering rally. The funds remain short, as they have been for the last 8-months. A failure of support at the $6.35 level could spark a whole new round of sales. Successful professional traders add to their winners. If the funds see a chance to add to this winning position, you can rest assured they will lace-up their selling-boots and get busy. Since January’s high at 8.34 ½, December wheat has endured grinding $2.00 haircut. Hedgers: No change in recommendations.
Soybeans: SX settled down 5 ¾ cents at $13.42 ½, which is a 3-week low settlement. The FSA report showed that prevented-plant acres jumped 68K acres from August’s 1.619 to today’s 1.687 million acres. Planted and failed acres grew by an impressive 2.598 million acres from August’s 72.061 up to 74.659 million acres. SX posted its high at 13.66 ½ on the opening bell of the pit trade at 8:30 AM but was met with a 34 ½ cent swoon down to $13.32 by 11 AM. SX missed filling the gap back to the August 23rd high at $13.31 by just one cent! The beans then staged a 16-cent, post lunch time rally, but that faded as well into the close. Technically, that 1 cent gap remains below down to $13.31 as support. Resistance above comes at $13.55 and the gap above at 13.71 ¼ -$13.80 ¾. Hedgers: October options expire on Friday.
Once again the Soybean and Corn markets received bullish news from a government report. Once again, after an initial spike higher, the grim reaper pulled out his scythe and went to work on the bulls. The FSA numbers were supportive of higher prices. When the smoke cleared, however, price discovery left us with a new 1-month low in December corn and with November beans 60 cents below the $14.00 level, which just days ago, was considered a “slam-dunk” by the information from the USDA.
Fair Warning: We have another USDA stocks report in 7 business days on the 30th. Then, 11 business days after that we have the “big one” on Friday October 11th, where we get production and supply and demand. These markets have shown us that anything can happen in their wake . They represent marketing opportunities that we here at Top Third can help you capture, or at the very least, minimize the negative impact on your bottom line. No matter if you are a producer or and end-user, a hedge exists to protect you through these gyrations. Make sure you call your broker and get set as we head into these crucial weeks of price discovery.
CER