MarketEdge AM Comments
Dec 01, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were lower overnight. March corn finished the overnight session off 3 cents, settling at 4.7975. January soybeans were off 12 ¼ cents, settling at 13.3050. In the outside markets, as of 7:40am: The US Dollar Index is off 20 points, trading at 103.482. January crude oil is up 15 cents, trading at $76.11. Precious metals are lower, except gold. Industrial metals are lower, except copper. The Electronic Mini-DJIA is off 6 points, trading at 36,004. Soybean futures were the downside leader overnight, pressured by the current Brazilian extended weather forecast and sharply lower soybean meal futures. In the 11-15 day timeframe, Central and Western Brazil are on tap to receive meaningful precipitation. Several respected weather analysts agree with this forecast. This has been the area concerning traders the most due to dry weather. Also, in the 16-30 day forecast, normal precipitation is forecasted for the center/west and drier weather is forecasted for the south, which has been far too wet of late. Corn futures rallied nicely yesterday in reaction to a friendly Export Sales Report. Not only were weekly corn sales bookings above traders’ expectations, but there was a sizeable sale reported to “unknown destinations.” “Unknown destinations” means China nine times out of ten. Traders have been patiently waiting for China to come out of the woodwork seeking US corn so this is definitely a positive demand story. Lately, the lion’s share of corn sales have been to Mexico, which is fine, however, they are a captive buyer of US corn so sales to Mexico don’t do much to help the overall demand picture. It is more or less of a given that Mexico will buy the overwhelming majority of its corn railed in from the United States. It just makes sense economically and logistically. Yesterday, the funds bought 3000 contracts of corn, sold 3000 contracts of soybeans, and bought 4000 contracts of wheat. They are now estimated to be net short 206,790 contracts of corn, net long 73,820 contracts of soybeans, and net short 111,420 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, March corn finds initial support at the overnight low, 4.7950, followed by the contract low charted on Wednesday, 4.7050. Initial resistance is at 4.8450 and 4.85, yesterday’s high and Monday’s high, respectively, followed by 4.9325, the double-high charted last Tuesday and Wednesday. January soybeans find initial support at 13.26, the overnight low, followed by the one-month low charted on Monday, 13.2350. Initial resistance is at 13.50, followed immediately by the high for the week charted on Wednesday, 13.52, and then 13.8925, last week’s high charted on Tuesday. Opening calls are lower.
Have a great Friday and an even better weekend.
Good Morning. Corn and soybean futures were lower overnight. March corn finished the overnight session off 3 cents, settling at 4.7975. January soybeans were off 12 ¼ cents, settling at 13.3050. In the outside markets, as of 7:40am: The US Dollar Index is off 20 points, trading at 103.482. January crude oil is up 15 cents, trading at $76.11. Precious metals are lower, except gold. Industrial metals are lower, except copper. The Electronic Mini-DJIA is off 6 points, trading at 36,004. Soybean futures were the downside leader overnight, pressured by the current Brazilian extended weather forecast and sharply lower soybean meal futures. In the 11-15 day timeframe, Central and Western Brazil are on tap to receive meaningful precipitation. Several respected weather analysts agree with this forecast. This has been the area concerning traders the most due to dry weather. Also, in the 16-30 day forecast, normal precipitation is forecasted for the center/west and drier weather is forecasted for the south, which has been far too wet of late. Corn futures rallied nicely yesterday in reaction to a friendly Export Sales Report. Not only were weekly corn sales bookings above traders’ expectations, but there was a sizeable sale reported to “unknown destinations.” “Unknown destinations” means China nine times out of ten. Traders have been patiently waiting for China to come out of the woodwork seeking US corn so this is definitely a positive demand story. Lately, the lion’s share of corn sales have been to Mexico, which is fine, however, they are a captive buyer of US corn so sales to Mexico don’t do much to help the overall demand picture. It is more or less of a given that Mexico will buy the overwhelming majority of its corn railed in from the United States. It just makes sense economically and logistically. Yesterday, the funds bought 3000 contracts of corn, sold 3000 contracts of soybeans, and bought 4000 contracts of wheat. They are now estimated to be net short 206,790 contracts of corn, net long 73,820 contracts of soybeans, and net short 111,420 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, March corn finds initial support at the overnight low, 4.7950, followed by the contract low charted on Wednesday, 4.7050. Initial resistance is at 4.8450 and 4.85, yesterday’s high and Monday’s high, respectively, followed by 4.9325, the double-high charted last Tuesday and Wednesday. January soybeans find initial support at 13.26, the overnight low, followed by the one-month low charted on Monday, 13.2350. Initial resistance is at 13.50, followed immediately by the high for the week charted on Wednesday, 13.52, and then 13.8925, last week’s high charted on Tuesday. Opening calls are lower.
Have a great Friday and an even better weekend.