MarketEdge AM Comments

Jul 28, 2023

(Phil Knuth)

Good Morning.  Corn and soybean futures were lower overnight.  September corn finished the overnight session off 11 ¾ cents, settling at 5.2150.  November soybeans were off 11 ¾ cents, settling at 13.8625.  In the outside markets, as of 7:45am:  The US Dollar Index is off 255 points, trading at 101.518.  September crude oil is up 4 cents, trading at $80.13 per barrel.  Precious metals are higher, except palladium.  Industrial metals are lower, except copper.  The Electronic Mini-DJIA is up 153 points, trading at 35,584.  Corn and soybean futures followed through from yesterday’s weak close overnight.  There is a general lack of fresh news regarding grains and oilseeds to discuss this morning.  Without anything new or exciting for traders to digest, the path of least resistance is lower.  Although the heart of the Corn Belt is currently dealing with less-than-ideal extreme heat and dry weather, traders remain focused on the extended forecast model that calls for moderate temperatures and widespread precipitation.  Remember, this is a FUTURES market.  As such, traders are often inclined to ignore current weather and look ahead to what is coming.  This is neither good nor bad, it’s just the way it is.  The situation in the Black Sea continues to be tenuous and is supportive to futures long-term, however, since the port bombings that got the market excited earlier this week, hot news out of that corner of the world has been scant.  From a short-term perspective, traders are inclined to take the “no news is good news” approach and liquidate risk premium.  In summary, the crop certainly isn’t “made” yet, there is plenty of weather concern out there, and the conflict between Russia and Ukraine is far from over, but there just isn’t enough bullish news at this moment, as far as Chicago is concerned, to inspire a rally.  Yesterday the funds sold 10,000 contracts of corn, sold 13,000 contracts of soybeans, and sold 7000 contracts of wheat.  They are now estimated to be net short 43,150 contracts of corn, net long 98,970 contracts of soybeans, and net short 38,010 contracts of wheat.  This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday.  From a chart perspective, September corn finds initial support at the overnight low, 5.2125, followed by the psychological 5.00 level, and then the double-low from July 12th and 13th, 4.74, which is also a two-year contract low.  Initial resistance is at 5.3325, the overnight high, followed by 5.50, and then the one-month high charted on Monday, 5.6450.  November soybeans find initial support at the overnight low, 13.8225, followed by 13.6825, last week’s low charted on Tuesday, and then 13.50.  Initial resistance is at the psychological 14.00 mark, followed by the 13-month high charted on Monday, 14.35.  Opening calls are lower.
Have a great Friday and an even better weekend.

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