With Harvest At Hand Are Market Lows In?

Corn and beans have likely placed a short-term bottom. The markets have come to grips with the idea that USDA may be right with their yield prediction. As combines roll yield data will be important. If actual yields are no better than USDAs numbers then it will be mildly friendly and markets should continue to respect the recent lows.

Support in Dec corn is the contract low of 344 established on August 31st resistance is the 20 day moving average 356. We have not traded above the 20 day moving average since August 10th. There are no sale recommendations at this time.

The soybean market has not been as bearish as has the corn and wheat market. Technically soybeans have held support well despite the fact that we are about to harvest one of the biggest crops in history. Support is the 100 day moving average of 959 and resistance at the 50 day moving average of 973. These are very tight ranges for soybeans and will not hold. Expect a breakout from these ranges. Considering that we are about to enter the harvest period only actual yield data lower than USDA numbers would be considered friendly. There is significant downside price risk in soybeans if USDA yield estimates are exceeded. Longer-term, the soybean:corn ratio still favors planting soybeans. Producers must keep this in mind going forward. Catch-up sales of soybeans are warranted.

Wheat has put in a long-term bottom but the price must remain low enough through the fall planting period in order to discourage farmers from planting wheat. World stocks are burdensome. A serious production issue will be needed in order to rectify the situation.