Traders are trying to justify the recent 4 day surge, which was in large part due to the previous forecast calling for 4+ inches of rain in Minnesota and other parts of the Midwest. This type of rain would delay farmers from being able to enter the fields and harvest their beans, and as you know, any type of delay in the harvesting will make prices rise. Today we are seeing the beans pull back, mainly because we will still have a very large crop and they have taken a good portion of the forecasted rain out of the future forecast. Demand is solid, but not as brisk as it was in August, which is also weighing on the market today. The bottom line is that the early yield reports need to come back to earth, otherwise we will be looking for something north of 50.6 bushels per acre come October. If yield is adjusted higher for the October USDA report by 1 bu/acre to 51.6, ending stocks will likely be revised higher to near 447 million bushels from 195 million this year and 191 million last year.
The market is up 4 days in a row and might start seeing producer selling interest at these levels. The upside does seem very limited from here and traders should look for a near term peak. The 9882 level should remain a key pivot point. Resistance is at 1004 with 9686 as key support.
Series 3 Licensed
Market Strategist II
Tony majored in Economics at Eastern Illinois University. He performed his thesis on the market price of corn in the market and the factors that affect it. Tony was drawn to futures trading because of the opportunity to have financial gains in an economic environment. He prides himself on working with customers one-on-one and developing a trading strategy based on the client's needs and wants.