MarketEdge AM Comments
May 26, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were higher overnight. July corn finished the overnight session up 4 cents, settling at 5.9475. July soybeans were up 12 cents, settling at 13.36. In the outside markets, as of 7:40am: The US Dollar Index is off 238 points, trading at 104.013. July crude oil is up 70 cents, trading at $72.53 per barrel. Precious metals are all higher. Industrial metals are higher, except zinc. The Electronic Mini-DJIA is up 60 points, trading at 32,866. Short-covering ahead of a three-day weekend propped up grain and oilseed futures overnight. In observance of Memorial Day, there will be no Sunday overnight session or Monday trading session. Trading will resume at 7pm on Monday night. Traders are closely monitoring the dry weather forecast for much of the heart of the Corn Belt. Most key growing areas would welcome a rain sometime in the next several days, however, the situation is far from dire and it is no time to hit the “panic button” just yet. The current forecast calls for a continuation of the dry pattern through the beginning of June, followed by a shift to a wetter forecast in extended weather models. As we all know, though, weather forecasts can and do change on a dime. Heading into a long holiday weekend, there could definitely be some changes to the forecast before trading resumes on Monday. So, short-covering and dry weather concerns are supportive to corn and soybean futures. Meanwhile, a planting season that was relatively uninterrupted allowing for timely, quick planting, absolutely atrocious export demand, and a huge Brazilian crop available to the world market at quite a discount to US values continue to drag on futures and limit upside potential. At this point, it is likely the lows are not in yet as it is only May 26th. On the flipside, given the mixed bag of factors impacting corn and soybean futures aforementioned, there really is no solid reason to chase after highs either, at this point. Yesterday, the funds bought 1000 contracts of corn, bought 1000 contracts of soybeans, and sold 1000 contracts of wheat. They are now estimated to be net short 84,660 contracts of corn, net long 4820 contracts of soybeans, and net short 136,475 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 the overnight high, 5.9625, followed closely by last week’s high charted on Monday, 5.9875, and then the psychological 6.00 mark, the high for the month charted on Monday, May 8th. Initial support lies at 5.8825, the overnight low, followed by 5.50, and then the 18-month low charted last Thursday, 5.47. July soybeans face initial resistance at 13.3975, the overnight high, followed by 13.50, and then the psychological 14.00 level. Initial support lies at 13.22, the overnight low, followed by 13.0475, the double low from Monday and Friday and the 10-month contract low, and then 12.99, the 16-month low charted on July 22, 2022. Opening calls are higher.
Have a great Friday and an even better Memorial Day Weekend. Take some time to reflect on the reason for this holiday: all the brave men and women, most just young adults with a lot of life ahead of them, who sacrificed their lives so that we may continue to live in a free country.
Good Morning. Corn and soybean futures were higher overnight. July corn finished the overnight session up 4 cents, settling at 5.9475. July soybeans were up 12 cents, settling at 13.36. In the outside markets, as of 7:40am: The US Dollar Index is off 238 points, trading at 104.013. July crude oil is up 70 cents, trading at $72.53 per barrel. Precious metals are all higher. Industrial metals are higher, except zinc. The Electronic Mini-DJIA is up 60 points, trading at 32,866. Short-covering ahead of a three-day weekend propped up grain and oilseed futures overnight. In observance of Memorial Day, there will be no Sunday overnight session or Monday trading session. Trading will resume at 7pm on Monday night. Traders are closely monitoring the dry weather forecast for much of the heart of the Corn Belt. Most key growing areas would welcome a rain sometime in the next several days, however, the situation is far from dire and it is no time to hit the “panic button” just yet. The current forecast calls for a continuation of the dry pattern through the beginning of June, followed by a shift to a wetter forecast in extended weather models. As we all know, though, weather forecasts can and do change on a dime. Heading into a long holiday weekend, there could definitely be some changes to the forecast before trading resumes on Monday. So, short-covering and dry weather concerns are supportive to corn and soybean futures. Meanwhile, a planting season that was relatively uninterrupted allowing for timely, quick planting, absolutely atrocious export demand, and a huge Brazilian crop available to the world market at quite a discount to US values continue to drag on futures and limit upside potential. At this point, it is likely the lows are not in yet as it is only May 26th. On the flipside, given the mixed bag of factors impacting corn and soybean futures aforementioned, there really is no solid reason to chase after highs either, at this point. Yesterday, the funds bought 1000 contracts of corn, bought 1000 contracts of soybeans, and sold 1000 contracts of wheat. They are now estimated to be net short 84,660 contracts of corn, net long 4820 contracts of soybeans, and net short 136,475 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 the overnight high, 5.9625, followed closely by last week’s high charted on Monday, 5.9875, and then the psychological 6.00 mark, the high for the month charted on Monday, May 8th. Initial support lies at 5.8825, the overnight low, followed by 5.50, and then the 18-month low charted last Thursday, 5.47. July soybeans face initial resistance at 13.3975, the overnight high, followed by 13.50, and then the psychological 14.00 level. Initial support lies at 13.22, the overnight low, followed by 13.0475, the double low from Monday and Friday and the 10-month contract low, and then 12.99, the 16-month low charted on July 22, 2022. Opening calls are higher.
Have a great Friday and an even better Memorial Day Weekend. Take some time to reflect on the reason for this holiday: all the brave men and women, most just young adults with a lot of life ahead of them, who sacrificed their lives so that we may continue to live in a free country.