On Wednesday the corn closed lower in a two-sided trade. The early rally lost ground as the wheat market started coming unglued and the beans fell strongly off their early highs. The March contract in the open outcry session matched Tuesday's low and held. Some scale down buying attributed to perceptions of better export demand, but yearly totals are, so far, behind it and will take more than we have seen to catch up. Rains in Argentina were noted but the beans lead the weather interpretations for now. One US firm released estimates for Argentina's corn crop at 16 million metric tonnes, down 1 from their month ago take on it. USDA latest is 16.5 mmt. Allendale's world production estimates, released to news wires this week, include a 14 mmt number for Argentina's crop.
Corn Technical Commentary:
Corn broke Tuesday's low on Wednesday, but did not close below it. So far 62% retracement is providing good support, but for how long? A close below $3.50 in the March contract might be a big psychological blow to the market.
Vital Technical Indicator: the next projected major turn day is forecast February 11.
There were modest gains in old crop soybeans with modest losses in new crop soybeans as (apparent) spreading continues. The market slid sharply off inter-day highs as rainfall totals for Argentina came in higher than expected from late Monday to early Tuesday. Some old crop support is also possible as word that Argentina's farmers are close to calling for a national strike to demand the government lower crop-exporting taxes. This might be counter-productive again especially after a report that their grain/oilseed exports in December fell 28% versus a year ago.
Soybean Technical Commentary:
Beans traded above the 100-day Moving Average early in the session on Wednesday, but they could not hold these gains. The close was back below 38% retracement, but still above Wednesday's low. The overall trend is still bearish.
Vital Technical Indicator: the next projected major turn day for soybeans is February 13, soybean meal tomorrow, and soybean oil February 6.
New lows for the move and another for the year on moderate losses in wheat. For a week or so, some have suggested that U.S. wheat prices have become competitive in the world markets, but apparently not as competitive as needed. Egypt bought 208,000 metric tonnes of French and Russia origin. Pakistan also bought 2 tenders of a total of 412,000 mt reportedly out of Russia or Russian/Australian origin. This And That Department: India sees its 2009 crop at 78.4 mmt, which is in line with year ago levels; China announced a "drought alert" with some areas seeing water levels at 50-year lows. Finally, there was some corn/wheat spreading noted on Wednesday.
Wheat Technical Commentary:
KC wheat closed below the 100-day Moving Average for the second day in a row Wednesday. The market is threatening to test 62% retracement at 565 as well. A close below here might be a selling opportunity.
Vital Technical Indicator: the next schedule projected major turn day in store for wheat is February 18.
|
|
|