Pay attention to global trade
Sep 15, 2017
Grain and soy markets are beginning this final day of the week with a minor swoon, but as I eluded to yesterday, overall this would not appear to have been a bad week particularly considering the nasty bit of news that the USDA threw our way. Were we to close right now, November beans would be up just over a dime and would complete the fourth week in a row of higher closes. Note as well that December meal, which only three days ago tested the lows of both this and last year, reversed sharply higher and is in position to close at the highest mark since the August production estimates were released. December wheat would be up around four cents, which does not sound particularly exciting but considering the reversal action witnessed along with the fact the long-term charts have swung back into an oversold position, the picture is beginning to look much more promising. Corn is the problem child and is in line to surrender around four cents for the week but realistically, if you ignore all the market noise, has been treading water now for a month and sits a little less that 10% off what has been the low ebb of this market for the past couple years. Add in the fact that long-term indicators are back into the oversold zone and have turned sideways and it would suggest that downside potential would be very limited in both price and time.
It would almost seem that we have just moved beyond discussion of South American harvest but that hemisphere is moving back into the limelight once again. The gut slot of bean planting in Brazil is still about 30-days in front of us but persistence dry weather has already been a concern and almost certainly has been one of the factor supporting bean prices as of late. Both the south central and west central regions of that nation are extremely dry and a weak/moderate La Nina is raising concern the dry pattern could continue. Further south in Argentina, the concern does not center on dryness but rather just the opposite and the potential impact it may be having on the growing wheat crop. Flooding this past weekend is estimated to have wiped out around 70,000 hectares, which out of 5.35 million planted does not sound like a big deal but considering that last month it is believed 80,000 hectares were destroyed and at planting time another 150,000 hectares never made it into the ground due to the wet…