The September 12th USDA Crop Production report was seemingly bullish, however it had the opposite effect on grain futures prices. The old saying, buy the rumor, sell the news was at play throughout the week in the grain complex.

After the report was released Monday morning, Corn and Wheat prices rallied from their opening lows. Corn futures were able to make an outside day chart pattern indicating a bullish trend. Soybeans were weak from the start and continued to weaken after trading below their major price support/resistance of 14.00 per bushel. Late last month, when Soybeans traded above their quadruple daily top at 14.00 per bushel, prices rallied for two weeks, and after the report, prices were pressured below that level and settled the day below it, causing a bearish chart pattern. With Soybean prices settling below 14.00 and forming bearish chart patterns, sellers kept pressuring the market into Friday with prices closing down five days in a row.

The following day, Corn prices opened higher and above Monday’s daily high which put the daily trend up in the morning, but throughout the day prices weakened and Corn broke lower forming another outside day and closing on the lower levels supporting a bearish trend. Corn prices had a great amount of volatility with bull spreading against Wheat. Spreaders were buying Corn and selling Wheat to widen the spread. The prior week, the Corn/Wheat spread had widened to 20 cents mid-week, but converged back to 0 towards the end of the week. Historically, Wheat has traded at a premium to Corn prices, but with the recent global demand from the BRIC countries, Corn prices have flourished against Wheat.

Wheat prices started to trade below their major price support of 7.00 per bushel which has not been seen since early August. Wheat prices bounced above and below 7.00 into Friday and were able to finally settle the week below 7.00 for the first time since mid July. Corn prices also followed the grain complex to the downside and Corn broke below 7.00 also due to Corn/Wheat spreading. Corn’s daily volume picked up towards the end of the week as Corn experienced major chart damage to the downside. Prices fell once again on Friday and settled at their lowest levels since last July. Corn and Soybean prices traded at contract highs in late August, in recent weeks prices are getting pressured down on overbought chart patterns, and profit taking.

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