Kansas Association of Wheat Growers

 

October 16 Dan Maltby Marketing Newsletter

The USDA issued their October WASDE update last week. It certainly wasn’t bullish, but more importantly, it wasn’t super bearish, and when markets have been beaten down so thoroughly, sometimes that’s enough to allow markets to come up for air.

Lat week I wrote how soybean prices were consolidating with the old lows rolling off the table and that the soybean market was getting interesting. This is the last 2 lines of last week’s table. Notice the 07/28 prices were all blue, which means they were the highest Friday closes in 11 weeks.

 

Now here is the updated weekly table. Notice how the 07/28 prices are not shown (rolled off the table), and for the most part, the blue numbers (11-week closing highs) are now the 08/04 prices, except for soybeans, which because the way the table works, printed a NEW blue number this Friday.

A new blue number means Momentum Funds should be in the process of liquidating any existing short soybean positions, and possibly entering a phase of going long (if prices continue higher).

Can soybeans pull wheat and corn higher? Possibly, although they don’t have to, and one other caveat we need to point out is that MGEX (spring wheat) actually posted a new red number, which is a new 11-week closing low, and thus Funds are in the process of liquidating any existing long spring wheat positions. Buy beans, sell spring wheat!!?? That’s a crazy spread, but…

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Source: Kansas Association of Wheat Growers