Tim Hannagan: Buying or selling ahead of Nov. report?
If South American rains come in the next 30 days, a pullback in prices could occur on all three grains.
But, failure of rains to come and talk of 10% or more declines on acres planted, we could put two dollars on beans pulling corn and wheat along for the ride.
Market fundamentals remain extremely bullish in the big picture, but be on alert for a measurable profit-taking correction.
After Tuesday's close of trading, USDA's weekly crop condition report came out. We're following the corn and beans condition very closely, to determine whether traders want to be buyers into the November 9 crop report or sellers. The corn condition came in at 68% in good to excellent condition, versus 66 the week prior 2% improvement. Of seven major producing states that will be harvesting their crops in October, with results showing up on the November USDA report, four had ratings over the national average, none of the states under the average and only one was lower on the week. So, this report certainly suggests that corn in the Western Corn Belt and northern Midwest of Iowa, Michigan, Minnesota, Nebraska ,North Dakota, South Dakota. and Wisconsin could see higher ratings through month-end .
Soybean condition came in at 64% good to excellent condition unchanged from the week prior. Only one of the six states rated over the national average declined from the week prior with two higher and the rest unchanged. Only one of the five key producers, with lower than the national ratings with harvest to show up on the November report, came in higher. It's the western Corn Belt and upper Midwest with the highest ratings, that are bringing in better yields now, that will show up on the November report.
We will use the next two weeks, or heading into the end of the month, to determine whether we could be buyers the week prior to the report for the fourth consecutive time. Or, will we be sellers. To date, it appears we might be sellers of that week prior to the report.