Monday's crop progress report showed little improvement in harvest from the week prior. Corn harvest is now 87% complete, versus 79% the week prior. Lagging behind was Ohio at 50%, Pennsylvanian 58%, Michigan 48% and Indiana 72%. Unless those Eastern grain belt states get to it this week, next week looks terrible for harvest. WXRISK.com the AG weather site sees a hurricane now in the Caribbean hitting the East Coast Sunday, October 28 and Monday 29. I’m thinking it's going to bring storms of historical proportions with heavy snows inland to Michigan, Ohio and Pennsylvania. This could lead to corn loss on ears dropping as the drought left ears underdeveloped with a weak attachment. This could end up as bullish news on the final crop production report of the crop year in January as acres abandoned goes up. Many believe that acres abandoned or cut for silage and animal feed is higher than recent USDA estimates.
Soy bean harvest came in at 80% complete versus 71% last week. Laggers are familiar. Ohio 63%, Indiana 69% and North Carolina 10%, are all in the potential storm area. Winter wheat planting is 81% complete, about equal the five year average. Of all the big producers only Texas is behind at 74% seeded. In part, this comes as 41% of the crop land in Texas is in poor to very poor soil condition, lacking enough moisture for planting or good emergence. There's no real concern here as unplanted acres will go in when dormancy breaks in Texas next March. The only insight for corn and bean harvest is the indications we may see further acreage abandonment.
Tuesday saw heavy selling in the grains, early in the session as they follow the lead of energy markets, metals and stocks being sold heavily by trend and index funds. But grains hit chart support and rallied showing life on its own thoughts. Next demand report is Thursdays weekly export sales report, telling us how much of each grain was sold for future shipment. With seasonal supply side fundamentals winding down, markets are 80% technical now. Each day, we come in and look at outside markets for early direction before charts dominate.
December corn on Wednesday meets the point of a pennant formation we have worked into. It generally means were about to break out either to the upside or downside. The December corn chart has support at 7.55 and resistance 7.60 Wednesday. That nickel range is the point. Needless to say corn needs to move out of the pennant range and find direction. On the upside 7.75 is next resistance and support down to 7.30 then 7.05. Corn wants to go lower as demand is extremely weak at harvests end when demand should be strong on availability. But beans are pulling corn off its lows each day as bean fundamentals are generally stronger.
November beans broke through its 15.30 chart resistance last Thursday becoming technically bullish to chartists. Chartists then created a near-term accelerated chart line off last weeks Monday low and this Monday's low. Today support off the line chart was 15.30, the days low was 15.29 and close 15.54. Should that line hold, support Wednesday becomes 15.35. A close under and 15.05 is next with resistance on the upside at 15.70 then 16.10. December wheat support is 8.55 and 8.15. Resistance 8.75 then 9.10.
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