CROP TOUR......... Mondays crop condition report showed 23% of the crop is in good to excellent condition, unchanged for the third consecutive week. Well under a year ago of 57% and the lowest rating of the year. The story here is the crop is done growing. Also, if we don't have a weekly up or down trend for the month to use when calculating what the September USDA monthly crop report on poduction may say, we will have to go by early harvest results. The worst of the crop will be harvested first as the growers take little to no yielding crops to collect drought insurance or move it to silage for animal feed. 17% of the crop is fully mature, but higher-yielding corn will sit in the field longer to dry, especially with prices firming up. Bean condition came in at 31% good to excellent condition up 1% from the week prior, up for the second consecutive week off the 29% low and under a year ago of 59%. Better, but not enough to suggest that there's room to boost production on the September crop report. Also, WXRISK.com a AG d weather site widely followed by the industries sees a genuinely dry week in the Midwest before rain enters by Sunday into early next week. This should derail further improvement on late maturing beans for next Monday's crop condition report. Only 9% of the crop remains to set the pod for bean development. No winter wheat seeding yet but that begins in September. Were watching key producing states weather as dry Western Plains winter wheat growers look to wait for rain and improved top soil before planting. Here is how field conditions rate for big producers. Kansas 0% in good to excellent condition. Colorado 4%, Oklahoma 3% and Texas 16%. Okay, we entered this week faced with two options. The market:pulling more profits out on post growing season, pre-harvest psychology. Or a rally to new highs on a combination of the old bullish news and news of exports. Well, two issues brought buying into the market. One, China's large bean purchases on last Thursdays weekly export sales report showing current high prices were not rationing the crop. Remember, were the only port to buy beans from until South American beans come the harvest next March. China's needs are 12 months a year for high-protein beans to meet their protein needs and demand as a emerging world economy moving 40 million people a year from poverty into the middle class. They cannot allow price to be a barrier . The other bullish news inspiring new buyers is talk out of a crop tour began Saturday. Reports coming in suggest yields are lower than our last USDA crop report. This sets up fear of another bullish supply side government report just 16 trading days away. This year, each month, has seen large trading funds develope a pattern of buying long into the monthly USDA crop report released the ninth to the eleventh each month, then break after the report only to rally again into the third week and breaking again. This month is a mold to the seven prior months. This means were close to the next correction. The last several reports, we discussed all the fundamentals but finished by saying use the charts for guidance. Reason, weather is ending as a pricing influence as the crops growing season ends and the next supply side government report is not until September 12, leaving chart parameters the funds best tool to use to trade from. On our last report we said if December corn breaks 8.25 and November beans break 16.50 on the upside buy long the market. As this is key resistance and and signals a buy to funds especially if you get a close over as it would be a new high close for each. Monday saw the break through followed buy a large Tuesday rally. Technicals now read like this. December corn support lies that 8.15, a close under and 7.75 is next. Resistance is 8.49 then 8.75. November bean support is 16.50 then 15.90. Resistance 17.55 then 17.95. December wheat support is 9.00 then 8.85. Resistance 9.35 then 9.55.
Join the Discussion