The dollar snapped a three-day losing streak on comments from Bernanke that the Fed may boost purchases of U.S Treasuries. With unemployment at 9.8 percent, the Fed faces a strong head wind in stimulating the economy forcing them to maintain a low interest rate environment. Corn and soybeans were weaker today because of dollar strength. However, wheat was stronger over concerns of persistent dryness in the Plains and wet conditions in Australia. As of last week, the trend following funds were short 230 MB of wheat suggesting there could be additional short covering.
The trend in March corn from 520.25 is higher, but choppy. Prices rose to 575.25 in the overnight session meeting my target at 575. Cycle analysis points to a top later this week or early next week with the chance of trading to 580. However, we have to hold 555 or the trend turns down. Longer term, the wave pattern of the daily chart shows the potential of advancing beyond last month’s high of 617.25, while the weekly chart is still at odds with this assessment.
Right now, old crop sales should be at the 70 percent level.
March soybeans continue to trend upward from last month’s low of 1183. Prices rallied to 1312.5 during the overnight session and stalled. A close beyond 1310 projects them moving past their high at 1354.5 to 1365, 1400 or 1420. The trend is up unless there is a close below 1270.
Old crop sales should be at the 60 percent mark.
March wheat traded to 798.75 today, but could not breach resistance at 800. The trend is up unless there is a sell-off below 745. Meanwhile, a close above 800 increases the chance for an advance beyond the August high of 864.25 to 890.
Old crop sales should be at the 70 percent level.
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