Grain Notes 9/24/18 AM Comments - Phil Knuth

Good Morning.  Corn and soybean futures were lower overnight.  December corn was off ¾ of a penny, settling at 3.5650.  November soybeans were off 6 ¼ cents, settling at 8.41.  In the outside markets, as of 7:45am:  The US Dollar Index is off 0.066, trading at 94.154.  November crude oil is up $1.04, trading at $71.82 per barrel.  Precious metals, aside from silver, are higher.  Industrial metals, aside from copper, are higher.  The Electronic Mini-DJIA is off 28 points, trading at 26,726. 

  • Corn and soybean futures have exhausted the rally from last week, for now.  Both commodities seem to be in a holding pattern now due to a general lack of any fundamental or geopolitical news that would encourage futures to continue higher. 
  • Although harvest progress in the Northern Corn Belt has been hampered by rainfall, harvest activity is clipping along in the East and the South.  So far, yield reports from the field have corroborated USDA’s large yield and production estimate figures. 
  • Despite the bearish fundamentals, December corn and November soybeans find solid underlying support at the current contract lows charted last week.  In fact, there is a lot of chatter among traders suggesting that the lows charted last week were harvest lows.  The November soybean seasonal chart supports this theory.  Several of the last five years and the five-year average low in November soybean futures were charted in September. 
  • On Friday, the funds bought 9000 contracts of corn, sold 2000 contracts of soybeans, and sold 3000 contracts of wheat.  They are now estimated to be net short 127,500 contracts of corn, net short 65,000 contracts of soybeans, and net short 3250 contracts of wheat. 
  • From a chart perspective, December corn finds initial support at the key 3.50 mark.  Further support lies at the contract low charted on Tuesday, 3.4250.  November soybeans find initial support at 8.25.  Further support lies at the contract low charted on Tuesday, 8.1225.  Opening calls are mixed/lower.

Have a great Monday.