Major Corn Support Breaks

[errolanderson]

Everyone . . . heads up. Last week was
wheat, now corn support is breaking.

March breaking $7.15/bu appears
technically significant and may signal a
leg lower in prices.

[wd9]

Foxes looking after the henhouse.

[errolanderson]

Market is always right whether up or down.
Its got nothing to do with hens or foxes.

[agstar77]

Looking at the 5 year trend . It is still up. When we break that I will be worried. There are real concerns about the 2013 U.S. crop, the drought continues and there may be a shortage of inputs because of low water levels in the Missisippi.

[wd9]

How does the market balance off sell
triggers that trigger other sales that
have nothing to do with the reality of the
amount of grain available?

[vvalk]

Errol. I realize from a traders perspective to sell
but are you a believer long term that these prices
are heading lower? Don't think on a tight crop you
want to sell and buy back on paper. I think the
basis, especially on canola, will be where it's at.
Just wondering on your view of the markets come
march to may? I think this down market is a
combo of three things. Selling before year end,
fiscal cliff talk and counting beyond record crops
for South America and even a bit of record crops
in North America next year. The bears in my
opinion are all in right now, not sure how ( besides
outside financial markets) they can get any more
bearish news factored in. When you price in the
best crops in ever SA, ignore the US drought,
might have to plow down a third of the WW crop,
ignore that soybeans are being shipped at way
too fast of pace and there may not be any other
exporters of wheat starting next month, not sure
over the long term ( or at least till the NA crop is
actually made)that there is a ton of downside from
here. I think we can go a bit lower,no question,
but to me come Feb/ march there could be
fireworks

[vvalk]

I don't believe SA can get their 150MT crop
to market either. Their infrastructure isn't
there so importers will have to come every
month to the USA for some of their needs

[errolanderson]

What occurred this morning is a
technical selloff. This $7.15 line of
support on March corn was well respected
by traders.

The break is significant in my mind as
it was not expected. Traders thought it
would hold. This is not to say that
corn can't recover, but now it needs
fresh news (IMO).

In my view, the path of corn affects
several grain markets including wheat
and canola. But it may also impact input
prices over time as well.

Realize I'm a pain in the ass for the
many grain bulls on this site, but truly
believe today's market action has
significance to grain markets heading
into 2013. My opinion only . . . .

[vvalk]

Can't say I'm a bull, just looking at the numbers. I
get skeptical when most analyst turn negative. I
remember farm tech last year very analyst was
saying sell sell and price the 2012 as well. The
market took off a couple of weeks later. As
Charlie says lets look at the demand. I know
wheat is lagging which may easily turn around If
the Black Sea region is out of wheat. We
knownArgwntina is. How does this price break
stop demand of soybeans. At the pace they are
going they will not make it to new crop before they
run out. We know that can't happen so what will
happen if we stay at the $13 to &14 soybean
range. Pretty sure $550 canola won't stop
demand on canola and at current disappearance
will we even make to summer with 13MT canola
crop. Errol I agree technicals are what they are
but the market has to make sure you have some
carry over no matter what you can't run out.
Farmers won't haul half a load of product at the
end Even half a load times however many
farmers adds up to a significant amount of grain
and its up to the market to make sure we don't get
there.

[errolanderson]

walk . . . you make excellent points.

March corn heaved toward $6.88/bu this
morning which is nearing major support.
Selling pressure hopefully will subside
later today.