William D. Moore
312-264-4337
wmoore@pricegroup.com
DECEMBER CORN
The 8-11-11 August Crop report continues to resonant thru the grain complex –
The willingness of the USDA to lower their estimates this early – certainly speaks
Volumes about a shrinking corn crop – which will be validated in the end by actual
Fall Harvest.
Technically, the 15 cent gap left on the “day charts†after the report – is still
Intact – after 9 trading days – a very powerful chart formation for upside bias!
The Crop Ratings out yesterday further corroborated the damage inflicted by
The July heat Wave with good-to-excellent at 57% (60% last week – 70% last year).
The only obstacle concerns the macro markets –namely the stock market –
Which has been floundering of late due to concerns about a global economic
Slow down – this could mute the corn’s upside reaction to Spring Flooding during
Planting and the hot & dry during July pollination.
Facing 15 year low stocks this Fall, the current scenario of a marginal crop, at best,
Is not what the market needed to help ration demand
Dec corn call spreads offer a nice vehicle to capture the upside potential
With limited risk !
NOVEMBER BEANS
Persistent dryness in the Bean Belt during the critical pod-filling month
Of August has extended the bean rally, originally ignited by the August Crop
Report.
Several upside gaps since the report have offered good technical support
With $14.oo representing stern topside resistance
The ongoing Pro Farmer Midwest Crop Tour has already indicated a drop
In pod counts, down 1.5% in Nebraska and 8.8% in Indiana.
There is a balancing act now – the Bears saying we’re plenty high enough
With harvest rite around the corner – while the Bulls claim historically low
Stocks allow “no margin for error†in this Fall’s harvest
Given that our production is already forecast to be 10% under last year,
We continue to recommend staying the course with November Call Spreads
DECEMBER WHEAT
December wheat has shadowed Dec Corn higher – motivated by
Crop concerns – both the spring wheat harvest currently underway
And the upcoming Winter wheat plantings in the drought ravaged
Southern Plains (soil moisture ?)
Meanwhile, exports continue to trickle in – 133, 500 metric of HRW
Wheat to unknown destinations today.
We feel wheat has upside potential but is coat-tailing Corn & Beans –
So we’d rather go with our call spreads in these “leader†markets !
Questions? Ask Bill Moore today at 312-264-4337
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