The Grains Review
For the week of August 22, 2011
By Pitguru.com
Coming back from the weekend the trade looks positive with modest help from crude and currencies. This is a continuation of the slight momentum traders saw on Friday with the market taking back Friday’s losses save for bean oil. The real bullish momentum remained in Minny wheat with MWU-MWZ widening the inverse to 25 with MWZ up 27-cents on the day. Corn rallied nicely on call spread buying and continued discussions of yield loss with Central IL all of a sudden looking far worse than expectations. On Friday beans rallied more on technical considerations with yield talk quiet here so far. Beans still have a decent amount of time and with weather moderating in MO and AR as late pod setting beans received a major break this weekend. Cool temps this week and into next week will not help but won’t kill it either. Beans remain technically bullish more than flat price bullish because for every penny they move higher Brazil and Argentina expand their expected acreage. Corn continued the upside momentum overnight moving to contract highs with momentum gaining as fund interest shows up…yet again. Beans continued their march higher with no sign of backing off if looking at S. Stochastics. Wheat is gaining as funds trim their shorts and problems with HRW planting considerations and German wheat help the fundamental side a little. Technically wheat continues to move back to the 100 and 200-day MAs in CHI and KC with Minny having blown above these on Friday with more seen overnight.
Overall look higher today with fresh contract highs expected in corn with beans still a ways away from high target. Wheat will start over the 100-day MA looking to move against the 200-day sitting right at $8.00. Traders will see if profit taking comes in there or fund short covering. Should be interesting.
Looking at the week ahead, markets have crop progress today with all eyes on key corn production states. Census crush and export sales come out on Thursday which is all traders have from the report side. Watch weather with Hurricane Irene a major impact later in the week. The Euro debt situation remains a major factor so watch for Merkel’s comments concerning the Euro bond issue. Crude will be choppy with Libyan rebels looking to completely overthrow Gadaffi this week. This will be bearish in that Libyan production will be back into the marketplace for the first time in months. Outside issues will remain a major impact but markets are in the divorce process so watch and listen for yield estimated with harvest results trickling in throughout the week. I remain bullish as long as the outside world does not fall to pieces.
Disclaimer: Past performance is not indicative of future results. Trading futures and options involves substantial risk of loss and is not suitable for all investors. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. The use of stop loss or contingent orders may not protect profits and may not limit losses to the amount intended. Certain market conditions make it difficult or impossible to execute such orders.