MarketEdge AM Comments
Jun 28, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were sharply lower overnight. September corn finished the overnight session off 13 ½ cents, settling at 5.4275. August soybeans were off 18 ¾ cents, settling at 13.7675. In the outside markets, as of 7:45am: The US Dollar Index is up 412 points, trading at 102.904. August crude oil is off 46 cents, trading at $67.24 per barrel. Precious metals are all lower. Industrial metals are higher, except copper. The Electronic Mini-DJIA is up 6 points, trading at 34,189. Yesterday’s weakness in corn and soybean futures spilled over into the overnight session, fueled by growing confidence that the dry weather pattern for the eastern half of the Corn Belt may indeed be changing. This was evident yesterday when traders shrugged off rapidly declining crop conditions ratings reported in the weekly Crop Progress and Conditions Report in favor of trading a wetter forecast for the Corn Belt. The majority of reputable private weather analysts are all in agreement that the Eastern Corn Belt will begin to see some meaningful rainfall in the weeks ahead. Overnight, radar was active in the Western Corn Belt and current radar shows precipitation moving into Illinois. Yesterday and overnight, traders were actively liquidating long positions established in the last two weeks when the market rallied. Not to beat a dead horse, but it is important to remember that this is typical behavior in a weather market. Traders add risk premium when it is warranted, but as soon as the forecast changes get out of the way because things are about to get ugly! Yesterday, the funds sold 10,000 contracts of corn, sold 15,000 contracts of soybeans, and sold 15,000 contracts of wheat. They are now estimated to be net long 59,060 contracts of corn, net long 78,415 contracts of soybeans, and net short 97,440 contracts of wheat. From a chart perspective, September corn finds initial support at the overnight low, 5.42, followed by the chart gap from June 12th, 5.2750-5.2975, and then the psychological 5.00 mark. Initial resistance is at 5.5850, the overnight high, followed by 5.9650, this week’s high charted on Monday. August soybeans find initial support at the overnight low, 13.7575, followed by 13.50, and then the psychological 13.00 level. Initial resistance is at the important 14.00 mark, followed by 14.3075, this week’s high charted on Monday, and then the three-month high charted one week ago, 14.47. Opening calls are lower.
Have a great Wednesday.
Good Morning. Corn and soybean futures were sharply lower overnight. September corn finished the overnight session off 13 ½ cents, settling at 5.4275. August soybeans were off 18 ¾ cents, settling at 13.7675. In the outside markets, as of 7:45am: The US Dollar Index is up 412 points, trading at 102.904. August crude oil is off 46 cents, trading at $67.24 per barrel. Precious metals are all lower. Industrial metals are higher, except copper. The Electronic Mini-DJIA is up 6 points, trading at 34,189. Yesterday’s weakness in corn and soybean futures spilled over into the overnight session, fueled by growing confidence that the dry weather pattern for the eastern half of the Corn Belt may indeed be changing. This was evident yesterday when traders shrugged off rapidly declining crop conditions ratings reported in the weekly Crop Progress and Conditions Report in favor of trading a wetter forecast for the Corn Belt. The majority of reputable private weather analysts are all in agreement that the Eastern Corn Belt will begin to see some meaningful rainfall in the weeks ahead. Overnight, radar was active in the Western Corn Belt and current radar shows precipitation moving into Illinois. Yesterday and overnight, traders were actively liquidating long positions established in the last two weeks when the market rallied. Not to beat a dead horse, but it is important to remember that this is typical behavior in a weather market. Traders add risk premium when it is warranted, but as soon as the forecast changes get out of the way because things are about to get ugly! Yesterday, the funds sold 10,000 contracts of corn, sold 15,000 contracts of soybeans, and sold 15,000 contracts of wheat. They are now estimated to be net long 59,060 contracts of corn, net long 78,415 contracts of soybeans, and net short 97,440 contracts of wheat. From a chart perspective, September corn finds initial support at the overnight low, 5.42, followed by the chart gap from June 12th, 5.2750-5.2975, and then the psychological 5.00 mark. Initial resistance is at 5.5850, the overnight high, followed by 5.9650, this week’s high charted on Monday. August soybeans find initial support at the overnight low, 13.7575, followed by 13.50, and then the psychological 13.00 level. Initial resistance is at the important 14.00 mark, followed by 14.3075, this week’s high charted on Monday, and then the three-month high charted one week ago, 14.47. Opening calls are lower.
Have a great Wednesday.