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Walsh Trading's Weekly Grain Report

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Twice this week soybeans rallied from the quarterly stocks September 30th low to the 50 and 200 day moving averages at 9.73 basis November. However the rallies both times were short lived as record crop sizes as harvest expands are being reported across the Midwest. For now rallies are being sold. However consistent rains that have delayed harvests in parts of Iowa, Minnesota, and Wisconsin have led to fears of lower production and decreasing yields in those areas. It was enough to spark some buying interest over two sessions (Monday 10/3 and Friday 10/7) but not enough to extend rallies above key technical resistance at the 9.73 level. The weekly harvest update showed bean harvest at 26 percent complete versus 10 percent last week and 36 percent last year. Condition ratings though continue to impress with 74 percent of the crop rated good to excellent, up one percent on the week. Private analysts keep raising soybean yield with some forecasts calling for beans at 52.5 BPA on next week’s WASDE report. Average analyst estimates are coming in at 51.5 BPA. It’s a tug of war with the battle between a burgeoning supply versus insatiable demand from China. Although China was thought to be out the market due to the week long holiday there, a purchase from “unknown destination” for 258K metric tons was announced mid-week. Unknown in the market is spelled C-H-I-N-A. It seems dips below 9.60 and 9.50 have prompted more Chinese purchases for future shipment. Export sales this week showed net sales of 2,179,600 million metric tons for the week ended September 29th. China accounted for 1.8 million of the weekly sales total. Just as in August where China was buying at a frenzied pace, it appears they are buying aggressively again especially on price dips into the beginnings of harvest.

Next Wednesday’s WASDE report could be a big one especially if the USDA confirms these private forecast yield estimates above 52 B.P.A. However if the USDA comes in at or near unchanged from last month’s report (50.6) for a report day surprise, we could see a significant move higher, most likely up to 995.0 basis November. On the flip side, if the USDA comes in on the high end of expectations, ending stocks would soar over 500 million bushels which would pressure trend and index following funds to liquidate their long positions in the market potentially sending soybeans to new lows below 9.34 basis November. To be protected on both sides of the market use an option strangle for exposure on both sides of the market. Into next Wednesday’s crop report look to buy the November 930 put and at the same time buy the November 10.00 call for eight cents or $400.00 plus all commissions and fees.

Technical’s read like this for this week. For November beans support is down at 9.43 and with a close under 9.30 is next. Resistance is up at 9.72 and then 9.88. For December corn support comes in first at 3.33 and then 3.27 Resistance comes in at 3.47 and then 3.56. For December wheat support comes in at 3.87 and then 3.80. Resistance is up at 4.05 and then 4.16.

For those interested I hold a weekly grain webinar each Thursday at 3pm. It is free for anyone who wants to sign up and link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.

Sign Up Now

For more info on Walsh Trading’s Absolute Ag Performance CTA please click on the link below:

Sean Lusk

Director Commercial Hedging Division

Walsh Trading

312 957 8103

888 391 7894 toll free

312 256 0109 fax

Walsh Trading

53 W Jackson Suite 750

Chicago, Il 60604

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About the author

Sean Lusk is a registered commodity broker and Director of the Commercial Hedging Division of Walsh Trading in Chicago. Sean began in the business as a runner on the trading floor during summer breaks from college in 1993. Upon his graduation from Southern Illinois University at Carbondale in 1996, Sean began his career on the trading floor of the Chicago Mercantile Exchange (CME). Overseeing billions of dollars of transactions working as a clerk in the Eurodollar pit, Sean took the next step and became a floor broker and member of the CME in 2003. He handled customer orders for banks and investment houses from all over the world from inside the Libor pit at the CME.

Now, at Walsh Trading, Sean utilizes his experience in the marketplace and his professional client service skills to aid and assist customers in their trading endeavors.  

He writes daily and weekly commentaries focusing on both the Precious Metals and Agricultural Markets along with related market activity.

Sean has been quoted in various media outlets discussing futures markets. 

These include:


  • Futures Magazine
  • Reuters
  • Forbes
  • Kitco
  • Nikkei Press


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