MarketEdge AM Comments
Sep 13, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were steady/mostly unchanged overnight. December corn finished the overnight session up a penny and a half, settling at 4.78. November soybeans were unchanged, settling at 13.4650. In the outside markets, as of 7:40am: The US Dollar Index is up 230 points, trading at 104.938. October crude oil is up 37 cents, trading at $89.21 per barrel. Precious metals are lower, except palladium. Industrial metals are all lower. The Electronic Mini-DJIA is off 85 points, trading at 34,911. Corn and soybean futures caught their breath and gathered their wits overnight following yesterday’s sharp sell-off after the release of the September WASDE Report. Was the report really THAT bearish? The answer is no. It was more or less a “neutral” report and figures came out about as expected, thus, the reaction of traders was “sell the fact.” As expected, USDA lowered the national average corn yield estimate to 173.8bpa, down from 175.1bpa last month and a mere 0.3bpa above the average trade estimate. The national average soybean yield estimate was lowered to 50.1bpa, down from 50.9bpa last month and a mere 0.1bpa below the average trade estimate. The harvested corn acreage estimate increased by 778,000 acres, which exceeded the average trade estimate and more than offset the reduction in the yield estimate figure, resulting in a new corn carryout projection of 2.221 billion bushels, an increase of 19 million bushels from last month. On the soybean side, the harvested acreage estimate did increase by 104,000 acres, however it failed to meet the average trade estimate and did not fully offset the adjustment to the yield figure. So, the soybean carryout projection was lowered by 25 million bushels from last month, to 220 million bushels. This new carryout projection still outshined the average trade estimate of 207 million bushels, though, as a result of additional cuts to the crush and export usage categories on the balance sheet. So, the report has come and gone and now traders can refocus their attention back to US harvest activity and actual yield reports from the field. So far, yield reports from the field have been extremely variable, however, that is typical early on in the harvest campaign. Traders will have a much better picture of what is actually out there in the coming weeks as harvest progresses. Yesterday, the funds sold 5000 contracts of corn, sold 12,000 contracts of soybeans, and bought 4000 contracts of wheat. They are now estimated to be net short 101,190 contracts of corn, net long 71,480 contracts of soybeans, and net short 88,140 contracts of wheat. From a chart perspective, December corn held key support yesterday, charting a double low with the two-year contract low charted on August 16th, 4.7350. Initial resistance is at last week’s high charted on Wednesday, 4.9025, followed by 4.9950, the August 29th high, and the psychological 5.00 level. November soybeans find initial support at the three-week low charted yesterday, 13.4075, followed by the August 23rd low, 13.3250. Initial resistance is in the 13.75 area, followed by the psychological 14.00 mark, and then the seven-week high charted on August 28th, 14.0950. Opening calls are steady/mixed.
Have a great Wednesday.
Good Morning. Corn and soybean futures were steady/mostly unchanged overnight. December corn finished the overnight session up a penny and a half, settling at 4.78. November soybeans were unchanged, settling at 13.4650. In the outside markets, as of 7:40am: The US Dollar Index is up 230 points, trading at 104.938. October crude oil is up 37 cents, trading at $89.21 per barrel. Precious metals are lower, except palladium. Industrial metals are all lower. The Electronic Mini-DJIA is off 85 points, trading at 34,911. Corn and soybean futures caught their breath and gathered their wits overnight following yesterday’s sharp sell-off after the release of the September WASDE Report. Was the report really THAT bearish? The answer is no. It was more or less a “neutral” report and figures came out about as expected, thus, the reaction of traders was “sell the fact.” As expected, USDA lowered the national average corn yield estimate to 173.8bpa, down from 175.1bpa last month and a mere 0.3bpa above the average trade estimate. The national average soybean yield estimate was lowered to 50.1bpa, down from 50.9bpa last month and a mere 0.1bpa below the average trade estimate. The harvested corn acreage estimate increased by 778,000 acres, which exceeded the average trade estimate and more than offset the reduction in the yield estimate figure, resulting in a new corn carryout projection of 2.221 billion bushels, an increase of 19 million bushels from last month. On the soybean side, the harvested acreage estimate did increase by 104,000 acres, however it failed to meet the average trade estimate and did not fully offset the adjustment to the yield figure. So, the soybean carryout projection was lowered by 25 million bushels from last month, to 220 million bushels. This new carryout projection still outshined the average trade estimate of 207 million bushels, though, as a result of additional cuts to the crush and export usage categories on the balance sheet. So, the report has come and gone and now traders can refocus their attention back to US harvest activity and actual yield reports from the field. So far, yield reports from the field have been extremely variable, however, that is typical early on in the harvest campaign. Traders will have a much better picture of what is actually out there in the coming weeks as harvest progresses. Yesterday, the funds sold 5000 contracts of corn, sold 12,000 contracts of soybeans, and bought 4000 contracts of wheat. They are now estimated to be net short 101,190 contracts of corn, net long 71,480 contracts of soybeans, and net short 88,140 contracts of wheat. From a chart perspective, December corn held key support yesterday, charting a double low with the two-year contract low charted on August 16th, 4.7350. Initial resistance is at last week’s high charted on Wednesday, 4.9025, followed by 4.9950, the August 29th high, and the psychological 5.00 level. November soybeans find initial support at the three-week low charted yesterday, 13.4075, followed by the August 23rd low, 13.3250. Initial resistance is in the 13.75 area, followed by the psychological 14.00 mark, and then the seven-week high charted on August 28th, 14.0950. Opening calls are steady/mixed.
Have a great Wednesday.