MarketEdge AM Comments

Nov 14, 2023

(Phil Knuth)

Good Morning.  Aside from nearby corn futures, corn and soybean futures finished the overnight session mostly lower.  December corn was up a quarter of a penny, settling at 4.7750.  January soybeans were off 2 ¾ cents, settling at 13.7975.  In the outside markets, as of 7:30am:  The US Dollar Index is off 100 points, trading at 105.529.  December crude oil is off 10 cents, trading at $78.16 per barrel.  Precious metals are lower, except gold.  Industrial metals are higher, except zinc.  The Electronic Mini-DJIA is up 28 points, trading at 34,413.  Yesterday’s impressive rally fell apart overnight as profit-taking dominated market action.  From a technical chart standpoint, this was disappointing.  January soybean futures came within a quarter of a penny of the two-month high charted yesterday overnight before retreating and December corn futures largely ignored the outside key reversal charted yesterday.  The explanations for the behavior of corn and soybean futures overnight provided by traders are profit-taking, harvest pressure, and improving Brazilian weather forecasts.  Yesterday afternoon, USDA reported that the national corn crop was 88% harvested.  This figure is a seven-point advancement from last week and is two points ahead of the five-year average.  The national soybean crop was reported to be 95% harvested.  This figure is a four-point advancement from last week and is four points ahead of the five-year average.  New forecast models for Brazil now call for better chances of rainfall in the 6-10 day timeframe for the central, western, and northern growing regions that could use a drink.  Also, despite wet weather in Southern Brazil, planting pace in that region is on par with the average pace.  Yesterday, the funds bought 8000 contracts of corn, bought 12,000 contracts of soybeans, and bought 2000 contracts of wheat.  They are now estimated to be net short 172,070 contracts of corn, net long 79,770 contracts of soybeans, and net short 94,200 contracts of wheat.  From a chart perspective, December corn faces initial resistance at the overnight high, 4.7850, followed by 4.8050 to 4.8125, which includes the highs from November 3rd, 6th, and 8th, and then the double-high charted on October 26th and 30th, 4.8425.  Initial support lies at 4.61, the new multi-year contract low charted yesterday.  Support below this level is thin.  January soybeans face initial resistance at the two-month high charted yesterday, 13.86, followed by the psychological 14.00 mark, and then 14.20, the 3 ½ month high charted on August 28th.  Initial support lies at 13.6850, the overnight low, followed by yesterday’s chart gap, 13.4975-13.5025, and then Thursday’s low, 13.36.  Opening calls are mixed/lower.
Have a great Tuesday.