MarketEdge AM Comments

Jan 10, 2024

(Phil Knuth)

Good Morning.  Corn and soybean futures were lower overnight.  March corn finished the overnight session off 2 cents, settling at 4.5725.  March soybeans were off 6 ½ cents, settling at 12.42.  In the outside markets, as of 7:45am:  The US Dollar Index is off 110 points, trading at 102.463.  February crude oil is up 90 cents, trading at $73.14 per barrel.  Precious metals are higher, except platinum.  Industrial metals are mixed.  The Electronic Mini-DJIA is off 3 points, trading at 37,760.  Of course, when things look like they may have finally turned the corner, grain and oilseed futures get another slap in the face.  Yesterday, corn and soybean futures managed to close higher with formidable trading volume, a signal that yesterday’s lows may well be a “line in the sand” and it is time for at least a bit of a recovery rally.  Unfortunately, overnight, Yemen’s Iran-backed Houthi rebels launched their largest missile and drone attack yet on shipping vessels in the Red Sea.  Thankfully, British and American Naval presence in the Red Sea was able to intercept the projectiles and prevent any damage to the targeted vessels.  Although the Houthis were not successful this time, the attack reported overnight renewed global concern about the viability of the Red Sea/Suez Canal shipping route going forward.  If commerce cannot flow unimpeded through this vital shipping route, there will be major global economic consequences and grain and oilseed traders cannot ignore these concerns.  Traders continue to anxiously await the release of the important January WASDE Report on Friday.  Friday’s report is arguably one of the very most important government reports of the calendar year as it will finalize 2023 production figures.  Yesterday, the funds were net even on corn, bought 1000 contracts of soybeans, and bought 3000 contracts of wheat.  They are now estimated to be net short 202,950 contracts of corn, net short 20,870 contracts of soybeans, and net short 59,080 contracts of wheat.  From a chart perspective, March corn finds initial support at the new contract low charted yesterday, 4.5175.  Support below this key level is very thin.  Initial resistance is at 4.6050, yesterday’s high, followed by the 4.70 area.  March soybeans find initial support at12.4025, the overnight low, followed by the new seven-month low charted yesterday, 12.34, and then the psychological 12.00 mark.  Initial resistance is at 12.50, the overnight high, followed by the 12.80 area, and then the chart gap from last Tuesday, 12.9075-12.9675.  Opening calls are lower.
Have a great Wednesday.

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