Last week we commented on the disappointing reaction to the USDA November report, and how it had showed the first indication that the bull market was tired. Since then we have formed a weekly downside reversal in corn and wheat (both last week) that indicated a potential top had finally formed in these two markets. This week soybeans have found tremendous price weakness such that we've dropped $1.50 from the most recent high in only 5 trading days!
Our election is over, and while the Republicans can celebrate their wins in the House and gains in the Senate, it might also be true that now that no one party controls the House, Senate, and Presidency that there will be more gridlock in Washington. Gridlock might not be all bad, though, as generally the US economy is stronger the less government seems to do.
Just when the market bears were lulled to sleep, boom, the market has another limit up day in corn today (Wednesday) that pumps the market right back up near old highs.
Grain prices exploded to new highs in corn and soybeans after, last Friday's blockbuster USDA report, where corn yields were dropped record amounts during an October report of a non-drought year.
Last week we talked about how markets were at a pivot point for corn and soybean markets, as both rallied sharply to new highs, yet there were some cracks in the bull market with some moves lower in corn (while soybeans continued to rally to new highs). Today, we have a market that so far this week has been variable at best, first rallying to new highs on Monday morning, only to close lower and add to those losses Tuesday. Wednesday's overnight trade was also sharply lower, making the bull market in jeopardy as we were on the verge of losing the upside momentum that the market has held si
Corn prices continue to rise the past week, pushing up a little faster recently as prices have pushed near $5 already, after topping $4.50 just last week.
Last week, we talked about how the corn market has been the leader of the grains, and finally last week it rallied past its recent 18 month range below $4.50, turning trend to higher and keeping the bulls alive with anticipation for how high the corn market can go.
Wheat market has dropped enough from recent highs to have formed a potential
top in the wheat market, a factor that may have major implications for the corn
and soybean markets. Wheat prices that have dropped $1.50 from the highs last
Thursday night indicate a potential 'blow off top' has been formed in wheat, as
prices have dropped more than 7% from recent highs. That means a potential top
has probably been formed in wheat for now, with prices rolling much higher than
Prices rally on drought.