Moving forward: Up or down?
It was a little rougher week for the grain markets this week, as favorable crop weather in much of corn and soybean country -- as well as other market factors like a surging U.S. Dollar index -- weighed on the grains, which ended Friday mixed after a couple sharply bearish days earlier in the week.
So, what's ahead in the next couple of weeks? First, there's next week's big USDA acreage and grain stocks reports. It could paint a picture of the grains in much shorter supply than thought just a week or so ago, says Agriculture.com and PFGBest.com Market Analyst Tim Hannagan.
"The fear will be corn, beans and spring wheat acres will come in lower from the unusually wet spring that may have led to fewer acres planted as normal planting dates past and of course losses from flooding. This should have shorts buy out and speculators buying long," he said this week. "It all adds up to the fear prior Thursday's big report. The heat dome still looks to enter the Midwest by June 30 in the Western Corn Belt and July 2 in Illinois and into the eastern Corn Belt. But, the heat is expected to back off by July 4."
Speaking of July 4, the real fireworks that day could be in grain prices, says Market Analyst Roy Smith. The holiday is typically a "pivotal point for prices," but at this point, he says it's tough to gauge "whether the pivot will point higher or lower in the week or weeks following the holiday.
"Looking at a long term chart of prices, there is little doubt that the market is in an up trend. Looking at price action in the last two weeks the trend has definitely been down," Smith says. "I suspect that 2011 will be one of those years when holding grain causes pain later in the summer. My hope is that there will be a rally, early next week, that will be a selling opportunity. If not, waiting for a weather rally will be a risky venture that will require steel nerves and a quick trigger finger to be profitable!"