Grain Notes 9/22/2020 AM Comments


Good Morning.  Corn futures were steady and soybean futures were higher overnight.  December corn finished the overnight session unchanged, settling at 3.6975.  November soybeans were up 4 ½ cents, settling at 10.27.  In the outside markets, as of 7:45am:  The US Dollar Index is off 0.029, trading at 93.627.  October crude oil is up 4 cents, trading at $39.35 per barrel.  Precious metals are lower, except gold.  Industrial metals are lower, except copper.  The Electronic Mini-DJIA is off 29 points, trading at 27,026.
 
  • Futures are attempting a bounce this morning, led by a recovery rally in wheat futures, following yesterday’s sharp sell-off.  After the behavior of corn and soybean futures yesterday, it appears as if the highs charted on Friday are now firmly entrenched as formidable upside resistance targets now that harvest is underway and is pressuring corn and soybeans. 
  • Traders are hoping for a confirmation of more sales to China in order to prop up futures.  A lack of Chinese buying so far this week played into yesterday’s sell-off.   
  • A steady national soybean crop condition rating and an improved national corn crop condition rating on yesterday afternoon’s Crop Progress Report are also weighing on corn and soybean futures. 
  • USDA left the national soybean crop condition unchanged from last week, at 63% good to excellent.  This figure is one point behind the five-year average and is 9 points ahead of last year at this time.  Soybean harvest progress was reported at 6% complete.  This figure is even with the five-year average and is four points ahead of last year at this time.  Leaf dropping was reported at 59%, up 22 points from last week, 9 points ahead of the five-year average, and 30 points ahead of last year at this time. 
  • USDA increased the national corn crop condition rating by one point from last week, to 61% good to excellent.  This figure is five points behind the five-year average and is four points ahead of last year at this time.  Corn harvest progress was reported at 8% complete.  This figure is a three point advancement from last week, is two points behind the five-year average, and is two points ahead of last year at this time.  Denting and maturity are both ahead of five-year averages. 
  • Yesterday, the funds sold 25,000 contracts of corn, sold 15,000 contracts of soybeans, and sold 20,000 contracts of wheat.  They are now estimated to be net long 61,200 contracts of corn, net long 219,975 contracts of soybeans, and net long 23,950 contracts of wheat. 
  • From a chart perspective, December corn failed to hold initial support, at 3.70, yesterday.  Further support lies at 3.65, followed by Wednesday’s low, 3.6175, and then the 3.60 area.  Initial resistance is at 3.75, followed by the six-month high charted on Friday, 3.7925. 
  • November soybeans find initial support at the overnight low, 10.1325, followed by the psychological 10.00 mark, and then 9.85, Wednesday’s low.  Initial resistance is found at the 10.30 area, followed by yesterday’s high, 10.4525, and then the contract high charted on Friday, 10.4675. 
  • Opening calls are steady/higher.
 
Have a great Tuesday.