MarketEdge AM Comments

(Phil Knuth)

Good Morning.  Corn and soybean futures were higher overnight.  July corn finished the overnight session up 3 cents, settling at 5.5825.  July soybeans were up 8 cents, settling at 13.4125.  In the outside markets, as of 7:40am:  The US Dollar Index is off 406 points, trading at 103.178.  June crude oil is up $1.24, trading at $73.10 per barrel.  Precious metals are all higher.  Industrial metals are mixed.  The Electronic Mini-DJIA is up 98 points, trading at 33,716.  Corn and soybean futures experienced a much welcomed short-covering bounce overnight as we head into the end of the week.  Unfortunately, there is no fundamental story that could/would support a meaningful rally, at this point.  This is purely technical short-covering.  All of the same factors that pressured futures all week long remain.  One of those factors, weak export demand, was on full display in yesterday’s Export Sales Report.  Old crop corn sales were non-existent due to sales cancellations and old crop soybean sales were miniscule.  Only new crop soybean sales were somewhat impressive.  Remember, nothing goes up or down in perpetuity.  So, we will gratefully take what we can get from a technical bounce in futures today, however, don’t expect too much.  Yesterday, the funds sold 2000 contracts of corn, sold 4000 contracts of soybeans, and sold 5000 contracts of wheat.  They are now estimated to be net short 130,505 contracts of corn, net long 9760 contracts of soybeans, and net long 132,650 contracts of wheat.  This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday.  From a chart perspective, July corn faces initial resistance at 5.5950, the overnight high, followed by the high for the week charted on Monday, 5.9875.  Initial support lies at 5.5150, the overnight low, followed by the new 17-month low charted yesterday, 5.47.  July soybeans face initial resistance at 13.50, followed by the psychological 14.00 level.  Initial support lies at 13.2325, the nearly 10-month low charted yesterday, followed by the psychological 13.00 mark.  Opening calls are higher.
 
Have a great Friday and an even better weekend.