top of page
If You Haven't, Try Our Daily Grain Market Reports FREE for 30 Days!

Tech Guy Weekend Comments 8/12/23

Some folks may refer to me as a conspiracy theorist, but I view it as having motivation to cut through the fluff of all the information, synthesize it and try to get to the truthful facts. I study many data points during the growing season - charts, rainfall, drought and otherwise.

It appears that there is something other than weather affecting crop growth for corn & beans. There seems to be something with the lack of sunlight occurring - smoke from fires or something else?

There have been many accounts of growth being stunted as one passes into and through the fields. It's my opinion that the USDA is very carefully and mathematically working to avert a crisis to keep prices from inflating too rapidly.

They may or may not succeed. I am not saying it is a disaster out there, only that there is more trouble than we are being shown at this point, and with stocks being what they are, especially in beans, matters are likely to become very tight before April of next year (SA harvest).

Think about this - they are saying the corn crop is bigger than last year. We will probably be below 170 or 168 by January. The key is that they started very high for the corn yield and have carefully subtracted a small number in 2 successive months - this is a pattern and a trend. Also, they've subtracted usage despite the world situation? They have their margins of error to work within and they are maximizing this latitude, in my opinion.

Subtracting some from new crop, adding some to old crop, subtracting a very specific number for new crop bean yield to reach 50.9 - more than 1 bushel off being the nod. Wouldn't be surprised if bean yield is ultimately below 49 to 48.5, - in future reports. Where will bean ending stocks be on the October or January report?

In my view, taking off more than 1 bushel instead of several 10ths of a bushel, is telling. If there is not more problems, why didn't they come down 0.9 or 1.0? The truth will probably be 1 to 2.5 or more bushels lower than this. They cut bean yield twice as much as the corn yield this month, as a percentage (2.% vs. 1. %). Is the bean crop is twice as in trouble as the corn? They will have 3 to 5 more chances to ratchet down yield.

To wrap this all up, we are considering drought area, precipitation and temperature values and timing, how poor conditions were at the end of June, sunlight issues, lack of improvement in some fields, despite adequate rainfall from July 1st till now, and technical analysis.

The above information coincides with what I believe I'm seeing on the daily, weekly and monthly charts and that corn, wheat and beans are currently resting on strong support.

Hopefully, at the very least I have given you information, viewpoints to consider.

December Corn capitulated on high volume to the downside yesterday, but could not test the 481 low. Here's the corn weekly chart again. Please notice the uptrending blue lines moving to the right.

Now we know why the November/September bean spread increased about 16 cents on Thursday - The old crop addition and new crop subtraction of ending stocks. As anticipated, some of the big money knows stuff.

One of our clients pointed out a possible head & shoulders pattern on the weekly soybean chart, recently. This would be a bearish formation, but we will first have a rally that marks a new, higher right shoulder, because beans recently marked a new right neckline.

The new neckline was confirmed when beans marked another leg higher, which terminated at 1433. I'm expecting at least 1580 to 1600 basis the November contract, next.

If this pattern fails, beans are going to rally further than this. Check out the weekly beans, noticing these features.

We are looking at the weekly wheat chart going back to 2008, so it's squenched up a lot - many bars per unit time. Notice the red horizontal line going back and how it has served as resistance and support over time.


bottom of page