NO CHANGE.......... As I noted recently, the USDA is extremely underfunded and understaffed as Homeland security division expanded at their expense. The monthly USDA crop report last week had a- ALL HANDS ON DECK- call to get the numbers together and that left the lights out in the crop condition offices. Monday's condition reports came in unchanged on corn, beans and wheat even though we saw some areas too wet and others too dry. This sets up a chance for measurable changes next week as the USDA plays catch-up. Corn came in at 60% good to excellent condition unchanged and 9% lower than a year ago. Yet key producers declined. Iowa down 6%, Indiana down 2%, Missouri down 3% and Nebraska off 4. Soybean condition came in unchanged at 61% good to excellent condition and down 5% from a year ago. Key producers higher were Indiana, up 3 at 47% good to excellent and Ohio up 3 at 61%. Losers were Iowa down 5, Missouri down 3 with Illinois unchanged. Illinois seems to be a mystery to the USDA. In last Thursday's report they put yields at 170 bushels per acre up 13 bushels from last year's near perfect crop weather, while this year saw a severely wet planting season and record heat during Julys key pollination. I have heard from growers in the very dry central and southern Illinois region reporting 120 bushels per acre. The northern Illinois corn region that had the most rain and one would think higher yields are reporting very disappointing yields with the thought July high heat offset the good rains. Were hearing about horrible Bean pod counts as well as beans dropping the pods. Traders saw last Thursday's USDA crop report as a hint to what's really happening with yields. They expect the September report to further cut yields. In the meantime weather the next three days is dry but Friday and Saturday could see 1 to 2 inches fall over much of Illinois into Indiana,with .25 to.75 inches over the rest of the Midwest. That could limit strength into weeks end. In the big picture i look for corn to not trade higher than 7.40 to 7.45 basis December futures with potential for 8.00 to 8.25 in September if the report unveils corn's true condition. Don't forget a near-term rally means fund profit-taking before months end then a rally into the September report. Here's the technicals. December corn support lies on an accelerated chart line at 7.20 then 6.98. We closed over our previous resistance at 7.22 making next resistance 7.40. November beans support is 13.35 on a accelerated trend line then 13.05. Resistance is 13.70 then 14.10. December wheat support is 7.00 with resistance 7.60. A close over 7.60 and we have a series of stop points at 7.85, 8.05, 8.20 then 8.40. The 7.50 to 7.60 area has been a major resistance area for five weeks with nine days hitting their before declining. Will it or won't it hold. Keep this in mind. With the winter wheat crop planting beginning in September in jeopardy across the drought stricken Southwest and trend following funds short 52,000 contracts. Should they decide to buy back those shorts we could see a short covering rally to 8.60.
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