The Times - Serving Waitsburg, Dayton and the Touchet Valley

There are no looming shadows in the northern hemisphere corn and soybean production areas. Plenty of worries, with some small zones seeing drought, but nothing strong enough to move the markets.

Crop condition reports from the largest 18 producing states reflect continued steady development of both corn and soybeans in the US, with corn at 63% good-to-excellent (GTE), unchanged from last week, and soybeans also at 63%, 1% lower.

The crop is late, but the subsoil moisture is there, and there is no extreme heat showing on the map. For wheat prices this market factor is a negative, as corn and soybean futures prices are both working on lows dating back at least a year.

As usual, grain and wheat sellers outside of the US are being as aggressive as they can, pricing their grains substan- tially lower than offers from US ports. While this is normal, US exports are lagging last year's. The sales factor is neutral at best.

Nationally, wheat harvest is rolling toward its last quarter, with Pacific Northwest white wheat results coming in just fine, although maybe not at the levels of the most recent couple of years. Walla Walla County is coming along at just about half done this week.

Nobody is complaining down at the coffee shop, although a shortage of good help keeps coming up.

The contrarian trader is beginning to look for a place to buy wheat. There is no fundamental supply/demand basis for this idea, and there are some unrequited technical targets for wheat that suggest a stab lower at the $6.05 level yet this year, but at Tuesday's $6.55 on the Chicago September futures, the big-picture move downward has been virtually unbroken since the highs of late November 2012 at just under $9.00. Crude Fibonacci analysis yields a $7.42 to $8.01 target win- dow IF the seasonally expected lows are in. IF. The big test now is whether the harvest lows printed just this last week will hold at about $6.48.

That is the nature of the market's focus right now. We will review recent lows every week until the confirmation that a change has emerged.

There are no guiding market factors strong enough to lead today, so more time is needed. Any price rally in this envi- ronment will mostly be motivated by "short-covering", as traders with profitable short-sold positions purchase futures to close out their trades, a notoriously weak and temporary basis for a price increase.

A solid rise above $6.90 would be required to define anything more than a quick jump back up to trend line in Chicago, but even a short- covering rally can show a 40- cent move up, a relief from the same old negative slope, if not a new life. Wanna dip your toe? Sell some put options lower down and 30-60 days out, then wait.

Information and opinions contained herein come from sources believed to be reli- able, but are not guaranteed as to accuracy or complete- ness.

The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account.

All funds committed should be risk capital.