Ag Markets Weak But Sales Unwarrented

Crop conditions for corn and soybeans continued their weekly decline this week but despite that corn traded lower on Tuesday after the report. We’ve seen a bit of a turnaround Wednesday and Thursday morning as I write this.

September corn held support at 365. There is much consolidation in the moving averages around 380. 380 will be resistance. A close above 380 would set us up for a test of 400 but with significant old crop corn stocks still on-farm, a catalyst will be needed to elevate the market to that level. That catalyst must come from either the weather forecast or money flow. To date neither has given us to boost we are looking for.

December corn tested support of 380 and turned higher from there. Target sales at 405 and 415. The contract high is 420 and becomes long-term resistance at this point.

August soybeans held support at 970. Target 1002 and 1013 for additional sales.

November soybeans tested support of 984 and turned higher from there. Support is now 1002. Momentum indicators are oversold so I look for a somewhat higher trade but we still lack the support in the 6-10 day weather forecast to launch values higher. If heat comes into the picture we should test the contract high of 1043.

September wheat has been a disaster trading lower for 12 out of the last 16 market sessions. Momentum indicators are still oversold even though we have seen higher values in the last two sessions. Producers have a tendency to want to sell a quick rally like this after such a downturn. Sales in oversold conditions like this should be avoided. Wheat fundamentals do not support lower values at this time. Upside targets will be established once a bottom is confirmed.