The dollar at record lows, crude oil at record highs, the euro at record highs have been the impetus behind the Chicago Board of Trade markets for the last several weeks. There’s no reason to believe that will change in the week ahead.
    “The definitive driver was the outside markets,” one floor trader said after the CBOT markets closed on Friday, Oct. 26.
     CBOT soyoil hit a 32-year high of 41.55 cents a lb on Friday and December corn neared its 200-day moving average of $3.74-3/4, moving up as crude oil hit an all-time high of over $92 a barrel. Soyoil as well as corn are closely linked to the energy markets given the expanding biofuels industry which uses those feedstocks to produce ethanol and biodiesel.
    So any strength in the dollar or weakness in crude oil will have a negative impact on CBOT corn and soyoil, the soy complex leader, traders said.
    Wheat seems to be on another track — deflating after its all-time high of $9.66-1/2 a bushel last month when flour millers panic bought wheat on outlooks for the world’s wheat supply to shrink to a 30-year low in the coming months.
    December wheat tumbled 70 cents in the week ended Oct. 26, closing down 2 cents at $8 a bushel on Friday.
    “Friday’s closing wheat levels represented an outside close to the downside for the week from a technical standpoint. That might be the catalyst for further breaking action for next week,” one CBOT wheat options trader said.
    More bearish inputs for wheat surfaced by Saturday morning when Egypt announced it bought 190,000 tonnes of Russian wheat — none from the U.S. — after last week’s tender.
    Chicago wheat traders were also a little nervous about the Friday’s expiration of November options since December futures closed at the exact $8 strike price. (Since there’s no November CBOT wheat futures contract, anyone wanting to exercise a Nov $8 call or put would end up with December futures position.)
    Open interest in $8 November options was about 2,400 puts and 1,200 calls going into Friday’s session. While a fair amount of $8 options traded, there’s still the risk that firms holding long $8 calls or $8 puts could exercise them over the weekend.
    Depending on how many are exercised it could lead to some volatility near the $8 level in December wheat when the markets open Sunday night and continuing Monday morning, option traders said.
    For the week ahead traders will be monitoring the dollar, crude oil, and the following factors:
    South American planting weather. Brazil’s No.1 soy state of Mato Grosso was benefiting from recent rains. However, traders were a little uncomfortable with Brazil’s Rio Grande do Sul region which is getting too wet. More rains are forecast for the coming week.
    Export pace. The sliding dollar has helped the export pace. So traders will continue to react to any demand signals. Asia has had a steady appetite for vegoils, including soybean oil, and last week corn saw its 13th consecutive week of U.S. export sales over a 1.0 million tonnes.
    Midwest harvest conditions. The Midwest harvest is moving into the background as a price signal. After this weekend, the corn and soy harvest should be wrapping up soon. That should ease hedge selling pressure. There continues to be a smattering of disappointing soybean yield reports, so that’s helping underpin soybean prices.