MarketEdge AM Comments

Nov 08, 2023

(Phil Knuth)

Good Morning.  Corn and soybean futures were higher overnight.  December corn finished the overnight session up 4 cents, settling at 4.7250.  January soybeans were up 16 ¼ cents, settling at 13.7825.  In the outside markets, as of 7:50am:  The US Dollar Index is up 280 points, trading at 105.822.  December crude oil is off 76 cents, trading at $76.61 per barrel.  Precious metals are lower, except silver.  Industrial metals are all lower.  The Electronic Mini-DJIA is up 24 points, trading at 34,239.  Corn and soybean futures rebounded off of yesterday’s disappointing close overnight.  Yesterday, December corn futures, once again, tested and held a pivotal chart support level that has been in place for a month and a half.  Although it was nice to see corn futures hold key support and rebound higher overnight, overall the outlook for corn is dismal given a burdensome carryout and weak demand.  The corn balance sheet features a carryout above 2 billion bushels and a stocks-to-use ratio of 15%.  If the current balance sheet is accurate, a 15% stocks-to-use ratio would be the highest ratio since the 2018/19 crop year.  USDA will update the balance sheets on Thursday with the release of the November WASDE Report.  Changes from last month’s report are expected to be minimal.  Soybean futures continue to be supported by South American weather concerns.  The forecast has not changed much of late and the same concerns remain.  Traders are closely monitoring dry weather in Central and Northern Brazil and too much precipitation in Southern Brazil impacting planting progress.  Yesterday, the funds sold 5000 contracts of corn, sold 2000 contracts of soybeans, and sold 2000 contracts of wheat.  They are now estimated to be net short 150,140 contracts of corn, net long 41,120 contracts of soybeans, and net short 103,840 contracts of wheat.  From a chart perspective, December corn faces initial resistance at 4.74, the overnight high, followed by 4.80, and then 4.8125, Friday’s high.  Solid support lies at 4.68, the double-low charted yesterday and Friday, followed immediately by the multi-year contract low charted on September 19th, 4.6775.  January soybeans face initial resistance at the new 1 ½ month high charted overnight, 13.8225, followed by the psychological 14.00 mark, and then 14.20, the three-month high charted on August 28th.  Initial support lies at 13.50, followed by the psychological 13.00 level.  Opening calls are higher.
Have a great Wednesday.   

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