Roundup: Chicago agricultural commodities consolidated over the week

Chicago Board of Trade (CBOT) grains futures close mixed over the week which ended October 7th, awaiting the next move in the U.S. dollar and the U.S. Central Bank Interest Rate Policy.

The most active corn contract for December delivery rose 3 cents weekly, or 0.89 percent, to 3.3975 dollars per bushel. December wheat delivery dropped 7.25 cents weekly, or 0.18 percent, to 3.9475 dollars per bushel. November soybeans rose 2.75 cents weekly, or 0.29 percent, to 9.5675 dollars per bushel.

Corn futures rallied slightly on the week, but were unable to breach major technical resistance. December delivery corn's failure to find any buying interest at 3.50 dollars per bushel, along with a rather lengthy period of favorable harvest weather forecast into late October, weighed on the market late week.

Range bound trade is expected to continue with a U.S. corn yield above 172 bushels per acre (BPA). Analysts maintain that both record supply and record demand will be focal points in the months ahead.

There's been an obvious improvement in combine reports over the last week or so, and sub-170 BPA yield is less likely. It will no doubt be a stocks-building year, and adverse weather in South America is needed to any rally of greater than 20-30 cents.

But demand continues to be impressive, and Gulf corn on any further break becomes the world' s cheapest grain. Ethanol margins are stout, blend margins are improving, and a seasonal rally in global cash wheat prices will help.

Wheat futures ended widely mixed, with winter contracts settling 7-13 cents weaker and spring wheat futures rallying 7 cents to a new three-month high.

The CBOT market continues to struggle with a lack of domestic feed use and exceptionally weak interior basis. However, fundamental input is turning more supportive. Export demand will continue to build slowly but steadily, with Russian domestic prices rising amid strength in their currency and a lack of farmer selling.

US Hard Red Winter Wheat is already the world's low cost milling origin, and quality issues seem to be getting more serious in Canada. Some 8 months remain in the international marketing year, and end user demand should find it way the US through the winter months.

Soybeans finished the week slightly higher after trading in an 18 cent range. This was the 6th week in a row that spot CBOT soybeans traded in a 9.40-10.00 dollars per bushel range. The market has been digesting a "big crop and big demand."

The week ahead will help determine how big is the 2016 U.S. soybean crop. The trade is betting on a yield above 52 BPA with some even talking yields as high as 53 BPA. U.S. demand has been rising to absorb a good portion of the big crop, but if US 2016 soybean yields exceed 52.5 BPA, the increase in production will fall into end stocks.

Analysts maintain that the FED will raise rates once in 2016- in December-just like last year. On Friday, the US Labor Dept said that 156,000 jobs were added to the U.S. economy in September. This was slightly less than what the trade has expected, but it was not low enough to change the narrative of the FED for a hike in interest rates. The CBOT grains futures are awaiting direction from the U.S. dollar before making its next move. Endit