MarketEdge AM Comments
Jul 20, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were higher overnight. September corn finished the overnight session up 1 ¾ cents, settling at 5.4725. August soybeans were up 2 ¼ cents, settling at 14.9375. In the outside markets, as of 7:50am: The US Dollar Index is up 159 points, trading at 100.440. August crude oil is up 27 cents, trading at $75.62 per barrel. Precious metals are all lower. Industrial metals are lower, except copper. The Electronic Mini-DJIA is up 15 points, trading at 35,268. Cue the broken record… The same issues that have supported grain and oilseed futures all week remain at play. First, the expiration of the Black Sea Export Agreement on Monday and the subsequent escalation in the Russia/Ukraine conflict has disrupted the global feedgrain supply chain and is lending plenty of support to futures. Second, weather/crop production concerns in the US continue to keep traders at the edge of their seats. Extended forecast models have now turned drier for the heart of the Corn Belt. We are in the middle of corn pollination and very close to the month of August, which is critical for soybean development, so there is definitely cause for concern here. Until the forecasted weather pattern changes, should it change, expect futures to remain well supported. This morning, USDA released the weekly Export Sales Report. Old crop sales bookings for both corn and soybeans left much to be desired while new crop sales bookings for both commodities were impressive. Last week, 236,800MT of corn was booked for sale for the current marketing year. This figure is on the bottom end of the range of trade estimates, is 49% lower than the previous week’s sales, and is 6% higher than the prior four-week average. For the 2023/24 marketing year, 491,600MT of corn was booked for sale last week. This figure is on the very upper end of the range of trade expectations. Last week’s corn export shipments totaled 383,800MT. This figure is 22% lower than the previous week’s shipments and is 38% lower than the prior four-week average. Primary destinations were Mexico, China, Japan, Colombia, and Canada. Last week, 127,000MT of soybeans were booked for sale for the current marketing year. This figure is on the bottom end of the range of trade estimates, is 58% higher than the previous week’s sales, and is 43% lower than the prior four-week average. For the 2023/24 marketing year, 760,300MT of soybeans were booked for sale last week. This figure is slightly above than the highest trade expectation. Last week’s soybean export shipments totaled 240,200MT. This figure is 29% lower than the previous week’s shipments and is 15% lower than the prior four-week average. Primary destinations were the Netherlands, Germany, Mexico, Indonesia, and Japan. Yesterday, the funds bought 14,000 contracts of corn, bought 3000 contracts of soybeans, and bought 15,000 contracts of wheat. They are now estimated to be net short 21,170 contracts of corn, net long 102,245 contracts of soybeans, and net short 34,410 contracts of wheat. From a chart perspective, September corn faces initial resistance at the three-week high charted yesterday, 5.5750, followed by the psychological 6.00 mark, and then 6.2475, the 7 ½ month high charted on June 21st. Initial support lies at 5.3775, the overnight low, followed by the psychological 5.00 level, and then 4.74, the double-low from last Wednesday and Thursday that is also a two-year contract low. August soybeans face initial resistance at the psychological 15.00 mark, followed by the 7 ½ month high charted yesterday, 15.1825, and the December 30th high, 15.1850. Initial support lies at 14.8225, the overnight low, followed by 14.50, and then 14.25, the low for the month charted on the 7th. Opening calls are higher.
Have a great Thursday.
Good Morning. Corn and soybean futures were higher overnight. September corn finished the overnight session up 1 ¾ cents, settling at 5.4725. August soybeans were up 2 ¼ cents, settling at 14.9375. In the outside markets, as of 7:50am: The US Dollar Index is up 159 points, trading at 100.440. August crude oil is up 27 cents, trading at $75.62 per barrel. Precious metals are all lower. Industrial metals are lower, except copper. The Electronic Mini-DJIA is up 15 points, trading at 35,268. Cue the broken record… The same issues that have supported grain and oilseed futures all week remain at play. First, the expiration of the Black Sea Export Agreement on Monday and the subsequent escalation in the Russia/Ukraine conflict has disrupted the global feedgrain supply chain and is lending plenty of support to futures. Second, weather/crop production concerns in the US continue to keep traders at the edge of their seats. Extended forecast models have now turned drier for the heart of the Corn Belt. We are in the middle of corn pollination and very close to the month of August, which is critical for soybean development, so there is definitely cause for concern here. Until the forecasted weather pattern changes, should it change, expect futures to remain well supported. This morning, USDA released the weekly Export Sales Report. Old crop sales bookings for both corn and soybeans left much to be desired while new crop sales bookings for both commodities were impressive. Last week, 236,800MT of corn was booked for sale for the current marketing year. This figure is on the bottom end of the range of trade estimates, is 49% lower than the previous week’s sales, and is 6% higher than the prior four-week average. For the 2023/24 marketing year, 491,600MT of corn was booked for sale last week. This figure is on the very upper end of the range of trade expectations. Last week’s corn export shipments totaled 383,800MT. This figure is 22% lower than the previous week’s shipments and is 38% lower than the prior four-week average. Primary destinations were Mexico, China, Japan, Colombia, and Canada. Last week, 127,000MT of soybeans were booked for sale for the current marketing year. This figure is on the bottom end of the range of trade estimates, is 58% higher than the previous week’s sales, and is 43% lower than the prior four-week average. For the 2023/24 marketing year, 760,300MT of soybeans were booked for sale last week. This figure is slightly above than the highest trade expectation. Last week’s soybean export shipments totaled 240,200MT. This figure is 29% lower than the previous week’s shipments and is 15% lower than the prior four-week average. Primary destinations were the Netherlands, Germany, Mexico, Indonesia, and Japan. Yesterday, the funds bought 14,000 contracts of corn, bought 3000 contracts of soybeans, and bought 15,000 contracts of wheat. They are now estimated to be net short 21,170 contracts of corn, net long 102,245 contracts of soybeans, and net short 34,410 contracts of wheat. From a chart perspective, September corn faces initial resistance at the three-week high charted yesterday, 5.5750, followed by the psychological 6.00 mark, and then 6.2475, the 7 ½ month high charted on June 21st. Initial support lies at 5.3775, the overnight low, followed by the psychological 5.00 level, and then 4.74, the double-low from last Wednesday and Thursday that is also a two-year contract low. August soybeans face initial resistance at the psychological 15.00 mark, followed by the 7 ½ month high charted yesterday, 15.1825, and the December 30th high, 15.1850. Initial support lies at 14.8225, the overnight low, followed by 14.50, and then 14.25, the low for the month charted on the 7th. Opening calls are higher.
Have a great Thursday.