MarketEdge AM Comments
Jul 18, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were higher overnight. September corn finished the overnight session up 10 ¾ cents, settling at 5.10. August soybeans were up 11 cents, settling at 14.95. In the outside markets, as of 7:45am: The US Dollar Index is up 37 points, trading at 99.879. August crude oil is up 14 cents, trading at $74.29 per barrel. Precious metals are all higher. Industrial metals are all lower. The Electronic Mini-DJIA is off 15 points, trading at 34,748. Futures started the overnight session lower in reaction to improving crop conditions ratings but quickly rebounded due to a host of uncertainties keeping traders on edge. Yesterday afternoon, USDA released the weekly Crop Progress and Conditions Report. The national corn crop condition rating improved by two points from last week, to 57% good to excellent. This figure is seven points behind last year at this time and is nine points below the five-year average. The national soybean crop condition rating improved by four points from last week, to 55% good to excellent. This figure is six points behind last year at this time and is eight points below the five-year average. The expiration of the Black Sea Export Agreement and weather/crop production concerns continue to prop up grain and oilseed futures. Yesterday, the Black Sea Export Agreement officially expired. This time around, it appears as if the Russians are not open to any kind of compromise in order to continue the deal. They are digging in their heels and demanding that their conditions be met in order to renew the arrangement. It seems unlikely that Ukraine will cave to any Russian demands, especially after Russia launched air strikes on the port of Odessa this morning. So, the Black Sea Export Agreement is likely dead in the water, creating a major hiccup in the global grain supply chain. Extended weather forecasts for the heart of the Corn Belt have now turned drier. Traders remain concerned with how the dry weather this summer will impact final production figures. Of course, we really won’t have a good grasp on this until combines roll, however, traders will continue to keep plenty of weather risk premium built into futures until the picture becomes more clear. Yesterday, the funds sold 7000 contracts of corn, bought 2000 contracts of soybeans, and sold 2000 contracts of wheat. They are now estimated to be net short 55,170 contracts of corn, net long 89,245 contracts of soybeans, and net short 54,410 contracts of wheat. From a chart perspective, September corn faces initial resistance at the overnight high, 5.1175, followed by yesterday’s high which was a two-week high for the contract, 5.1975, and then 5.50. Initial support lies at the psychological 5.00 mark, followed by 4.9525, the overnight low, and then 4.74, the double-low from Wednesday and Thursday that is also a two-year contract low. August soybeans face initial resistance at the psychological 15.00 level, followed closely by the five-month high charted on the 3rd, 15.0475. Initial support lies at 14.7425, the overnight low, followed by 14.50, and then 14.25, the July 7th low. Opening calls are higher.
Have a great Tuesday.
Good Morning. Corn and soybean futures were higher overnight. September corn finished the overnight session up 10 ¾ cents, settling at 5.10. August soybeans were up 11 cents, settling at 14.95. In the outside markets, as of 7:45am: The US Dollar Index is up 37 points, trading at 99.879. August crude oil is up 14 cents, trading at $74.29 per barrel. Precious metals are all higher. Industrial metals are all lower. The Electronic Mini-DJIA is off 15 points, trading at 34,748. Futures started the overnight session lower in reaction to improving crop conditions ratings but quickly rebounded due to a host of uncertainties keeping traders on edge. Yesterday afternoon, USDA released the weekly Crop Progress and Conditions Report. The national corn crop condition rating improved by two points from last week, to 57% good to excellent. This figure is seven points behind last year at this time and is nine points below the five-year average. The national soybean crop condition rating improved by four points from last week, to 55% good to excellent. This figure is six points behind last year at this time and is eight points below the five-year average. The expiration of the Black Sea Export Agreement and weather/crop production concerns continue to prop up grain and oilseed futures. Yesterday, the Black Sea Export Agreement officially expired. This time around, it appears as if the Russians are not open to any kind of compromise in order to continue the deal. They are digging in their heels and demanding that their conditions be met in order to renew the arrangement. It seems unlikely that Ukraine will cave to any Russian demands, especially after Russia launched air strikes on the port of Odessa this morning. So, the Black Sea Export Agreement is likely dead in the water, creating a major hiccup in the global grain supply chain. Extended weather forecasts for the heart of the Corn Belt have now turned drier. Traders remain concerned with how the dry weather this summer will impact final production figures. Of course, we really won’t have a good grasp on this until combines roll, however, traders will continue to keep plenty of weather risk premium built into futures until the picture becomes more clear. Yesterday, the funds sold 7000 contracts of corn, bought 2000 contracts of soybeans, and sold 2000 contracts of wheat. They are now estimated to be net short 55,170 contracts of corn, net long 89,245 contracts of soybeans, and net short 54,410 contracts of wheat. From a chart perspective, September corn faces initial resistance at the overnight high, 5.1175, followed by yesterday’s high which was a two-week high for the contract, 5.1975, and then 5.50. Initial support lies at the psychological 5.00 mark, followed by 4.9525, the overnight low, and then 4.74, the double-low from Wednesday and Thursday that is also a two-year contract low. August soybeans face initial resistance at the psychological 15.00 level, followed closely by the five-month high charted on the 3rd, 15.0475. Initial support lies at 14.7425, the overnight low, followed by 14.50, and then 14.25, the July 7th low. Opening calls are higher.
Have a great Tuesday.