USDA October Report; Feast or Famine?

December corn received no help from yesterday’s USDA monthly supply and demand report but traded higher nevertheless in sympathy with soybeans. We actually traded below the contract low of 344 leaving the down trend intact. A close below 344 opens up the risk of a trade to 301.

November soybeans were the beneficiary of USDA’s surprise decrease in average yield and traded nearly 30 higher during yesterday’s session. The 38 cent per bushel trading range was the largest daily range traded since June 30, 2017. This extension higher is a classic sell signal and the kind of move we long for as producers, however, it also captures the interest of end users needing coverage and speculators looking for a trend change. The spec trade went into yesterday’s report with a very small short position and came out of the session with a very small long position. The question now is, “where will they take us from here?” Seasonally it is the time of the year that we normally establish a low and end users get coverage. While set backs are anticipated current USDA numbers likely support the notion that a seasonal low has been established.

Support in November soybeans is 975, resistance is 999. Target 1040.

December wheat continues to flounder as farmers plant a crop that is largely unneeded in the world. Support is the contract low of 423. There is no upside objectives at this time.