MarketEdge AM Comments

Sep 18, 2023

(Phil Knuth)

Good Morning.  Corn and soybean futures were steady/slightly lower overnight.  December corn finished the overnight session unchanged, settling at 4.7625.  November soybeans were off 2 ½ cents, settling at 13.3775.  In the outside markets, as of 7:40am:  The US Dollar Index is off 50 points, trading at 105.268.  October crude oil is up 89 cents, trading at $91.66 per barrel.  Precious metals are mixed.  Industrial metals are all lower.  The Electronic Mini-DJIA is up 6 points, trading at 34,933.  Corn and soybean futures remain in a state of Limbo, awaiting full-blown harvest activity.  Without a clear picture of actual crop size from real yield reports from the field, traders are content to leave futures locked within current trading ranges.  Corn and soybean futures are supported by recent post-WASDE Report lows charted last week.  In the meantime, poor exports, plenty of competition from large Brazilian crops, and Misssissippi River logistical issues are keeping a lid on upside potential.  China continues to book cargoes of Brazilian soybeans and corn as far out as October with rumored buying even later in the calendar year.  This is atypical as the US is usually China’s favorite for the Sep/Oct/Nov timeframe, however, given the availability of cheaper Brazilian supplies as a result of bumper crops there this past year, it makes sense for the Chinese to favor South America over the US.  With a new Brazilian crop becoming available as early as Jan/Feb, the window of opportunity for the US is definitely shrinking.  On Friday, the funds sold 5000 contracts of corn, sold 12,000 contracts of soybeans, and bought 6000 contracts of wheat.  They are now estimated to be net short 143,160 contracts of corn, net long 63,475 contracts of soybeans, and net short 79,230 contracts of wheat.  From a chart perspective, December corn finds initial support at the overnight low, 4.7475, followed immediately by the double-low charted on Tuesday and August 16th that is also a two-year contract low, 4.7350.  Initial resistance is at 4.80, followed by 4.9025, the September 6th high, and then 4.9950, the four-week high charted on August 29th.  November soybeans find initial support at 13.3525, the overnight low, followed immediately by the four-week low charted on Wednesday, 13.3375.  Initial resistance is at 13.50, followed by Friday’s high, 13.6775, and then the September 6th high, 13.8475.  Opening calls are steady/lower.
Have a great Monday.

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