MarketEdge AM Comments

Sep 19, 2023

(Phil Knuth)

Good Morning.  Corn and soybean futures were lower overnight.  December corn finished the overnight session off 1 ¾ cents, settling at 4.6975.  November soybeans were off 3 cents, settling at 13.1375.  In the outside markets, as of 7:45am:  The US Dollar Index is off 330 points, trading at 104.869.  October crude oil is up $1.20, trading at $92.68 per barrel.  Precious metals are all higher.  Industrial metals are higher, except copper.  The Electronic Mini-DJIA is up 3 points, trading at 34,938.  Once December corn and November soybeans took out key support levels on the charts during yesterday’s trading session, it was hard to stop the bleeding.  New lows were once again charted overnight.  There was an uptick in trading volume during yesterday’s sell-off, suggesting traders and speculators are happy to chase the market lower, at this point.  There is no “story” out there right now to lend support to futures.  Harvest is picking up momentum and, so far, though yield reports have been variable, they have been pretty much “as expected” in the areas that were extremely dry and/or with poorer soil types and “better than expected” in the Eastern Corn Belt.  Meanwhile, crop maturity is ahead of schedule, so, harvest activity should be in full swing before the end of the month.  The expectation of harvest pressure is weighing on futures.  Yesterday afternoon’s Crop Progress and Conditions Report show corn denting, maturity, and harvest progress at 90%, 54%, and 9%, respectively, and 54% of the nation’s soybean crop was reported to be dropping leaves, ahead of 39% last year at this time and the five-year average, 43%.  Finally, with the risk of being a bit vulgar, demand is in the toilet.  With a giant Brazilian crop to contend with, it does not appear that demand prospects will improve anytime soon.  Yesterday, the funds sold 5000 contracts of corn, sold 10,000 contracts of soybeans, and sold 8000 contracts of wheat.  They are now estimated to be net short 148,160 contracts of corn, net long 53,475 contracts of soybeans, and net short 87,230 contracts of wheat.  From a chart perspective, December corn took out the double-low from last Tuesday and August 16th that was also a two-year contract low yesterday, 4.7350.  Initial support now lies at the fresh two-year low charted overnight, 4.6775.  Initial resistance is at 4.7150, the overnight high, followed by 4.80.  November soybeans charted a new five-week low both yesterday and overnight.  The overnight low, 13.08, now stands as initial support, followed by the double-low from August 15th and 16th, 13.03, and then the psychological 13.00 mark.  Initial resistance is at 13.1750, the overnight high, followed by the 13.50 area, and then Friday’s high, 13.6775.  Opening calls are lower.
Have a great Tuesday.

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