MarketEdge AM Comments

Nov 13, 2023

(Phil Knuth)

Good Morning.  Corn futures were lower and soybean futures were higher overnight.  December corn finished the overnight session off 1 ¾ cents, settling at 4.6225.  January soybeans were up 7 ½ cents, settling at 13.55.  In the outside markets, as of 7:30am:  The US Dollar Index is up 50 points, trading at 105.910.  December crude oil is up 4 cents, trading at $77.21 per barrel.  Precious metals are higher, except silver.  Industrial metals are lower, except copper.  The Electronic Mini-DJIA is off 51 points, trading at 34,287.  Corn futures remain under plenty of pressure as a result of the fallout from Thursday’s bearish WASDE Report, with the December contract charting another fresh multi-year low overnight.  Meanwhile, an uptick in Chinese buying and South American weather concerns have breathed new life into the soybean complex.  South American weather is still less than ideal.  Dry conditions in Central, Western, and Northern Brazil has the crop there off to a poor start while wet conditions in Southern Brazil are delaying planting progress.  For now, traders are considering this a “soybean story,” however, it really appears to be more of a “corn story.”  The soybeans will be planted and additional acreage will likely cancel out lower yields, but dry weather in the northern and central growing regions may impact Safrinha acreage and wet weather in Southern Brazil will force many farmers to switch acres intended for corn over to soybeans.  As with any weather market, this situation will continue to be scrutinized by traders and will likely take many twists and turns before it is all sorted out.  On Friday, the funds sold 3000 contracts of corn, bought 2000 contracts of soybeans, and sold 2000 contracts of wheat.  They are now estimated to be net short 154,140 contracts of corn, net long 37,120 contracts of soybeans, and net short 99,840 contracts of wheat.  The CFTC Commitment of Traders Report will be released this afternoon (delayed from Friday due to observance of Veterans Day) and will show actual managed money positions as of Tuesday.  From a chart perspective, December corn finds initial support at the new multi-year contract low charted overnight, 4.61.  Support below this new low is thin.  Initial resistance is at 4.6475, the overnight high, followed by the 4.80 area.  January soybeans gapped higher overnight.  The overnight chart gap, 13.4975-13.5025, stands as initial support, followed by 13.36, Thursday’s low.  Initial resistance is at 13.5775, the overnight high, followed by the two-month high charted on Thursday, 13.8450.  Opening calls are mixed.
Have a great Monday.

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