Overview:
China hiked their lending rate by one-quarter point over the weekend in an effort to cool their economy. However, it had minimal impact on the grains as traders are focused on hot temperatures in Argentina. Be advised that there may be profit taking by the funds this week as they close out 2010. Recently, I saw a poll where only 9 percent of producers were bearish grains for 2011. This is not the time to become complacent. Too many issues could wreck havoc in the grains in light of bullish fundamentals, such as, a sovereign debt or a geopolitical event. Remember, there is a massive amount of money allocated to commodities by large investors that could literally evaporate at the whim of trouble or an unforeseen event.
Corn:
March corn traded rallied to 619 today taking out last month’s high of 617.25. Short-term, the market is overextended and due for a one-two day pullback to 605-600. Unless there is a sell-off and close below 595, the trend is higher with the potential for an advance to 635. A major top could occur during the first week of January, but it will probably be the second week. Right now, the cycles are probably more reliable than price projections.
Old crop sales should currently be at the 70 percent level.
Soybeans:
March soybeans have risen past the November high at 1354.5 to 1389.75. We are due for a short-term top with support likely on a setback to 1365-1350. Meanwhile, the trend is up with prices on track for a rally to 1400 and probably closer 1420. A more bullish pattern points to a move upward to 1460. Be advised that a major top could occur during the same period as corn.
Old crop sales should be at the 60 percent mark.
Wheat:
March wheat fell to 766 during the overnight session and rebounded. Unless there is a sell-off below 756, the trend is higher with the potential for prices climbing to 825 or 845. If the August high of 864.25 is exceeded, look for a move higher to 890.
Old crop sales should be at the 70 percent level.
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Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned.