MarketEdge AM Comments
Feb 01, 2024
(Phil Knuth)
Good Morning. Corn and soybean futures were lower overnight. March corn finished the overnight session off 3 ¾ cents, settling at 4.4450. March soybeans were off 14 ¼ cents, settling at 12.08. In the outside markets, as of 7:40am: The US Dollar Index is up 280 points, trading at 103.549. March crude oil is up 82 cents, trading at $76.67 per barrel. Precious metals are all higher. Industrial metals are mixed. The Electronic Mini-DJIA is off 8 points, trading at 38,272. Corn and soybean futures were under pressure overnight by a stronger US Dollar, a forecast that calls for much needed precipitation in Argentina late next week, and struggling export demand on the cusp of a large South American harvest. The aforementioned issues have been dragging on corn and soybean futures all week, however, before you give up and jump off the silo, there is some good news! The air is ripe for a recovery rally. Futures are technically oversold, the funds are holding massive, unsustainable short positions (especially in corn), and the charts are exhibiting bullish divergence. The question is not IF there will be a meaningful rally, but WHEN? This morning, USDA released the weekly Export Sales Report. Weekly soybean sales bookings were extremely disappointing while weekly corn sales bookings were decent. Last week, 1,206,700MT of corn was booked for sale for the current marketing year. This figure is on the upper end of the range of trade estimates, is 26% higher than the previous week’s sales, and is 58% higher than the prior four-week average. Last week’s corn export shipments totaled 911,400MT. This figure is 2% lower than the previous week’s shipments and is even with the prior four-week average. Primary destinations were Mexico, Japan, China, Colombia, and Canada. Last week, 164,500MT of soybeans were booked for sale for the current marketing year. This figure is a marketing-year low, is over 300,000MT below the lowest trade estimate, is 71% lower than the previous week’s sales, and is 64% lower than the prior four-week average. Last week’s soybean export shipments totaled 949,900MT. This figure is 15% below the previous week’s shipments and is 18% below the prior four-week average. Primary destinations were China, Egypt, Mexico, Spain, and Japan. Yesterday, the funds were net even on corn, bought 2000 contracts of soybeans, and sold 5000 contracts of wheat. They are now estimated to be net short 276,470 contracts of corn, net short 102,390 contracts of soybeans, and net short 72,345 contracts of wheat. From a chart perspective, March corn finds initial support at 4.4350 and 4.4325, the lows from overnight and yesterday, respectively, followed by the contract low charted on Tuesday, 4.3650. Initial resistance is at 4.4875, the high for the week charted yesterday, followed immediately by 4.50, and then 4.5325, the three-week high charted one week ago. March soybeans find initial support at 12.0725 and 12.0675, the lows from overnight and yesterday, respectively, followed by the psychological 12.00 mark, and then 11.8775, the nearly eight-month low charted on Tuesday. Initial resistance is at 12.23, the high for the week charted yesterday, followed by 12.4750, the three-week high charted one week ago, and then 12.50. Opening calls are lower.
Have a great Thursday.
Good Morning. Corn and soybean futures were lower overnight. March corn finished the overnight session off 3 ¾ cents, settling at 4.4450. March soybeans were off 14 ¼ cents, settling at 12.08. In the outside markets, as of 7:40am: The US Dollar Index is up 280 points, trading at 103.549. March crude oil is up 82 cents, trading at $76.67 per barrel. Precious metals are all higher. Industrial metals are mixed. The Electronic Mini-DJIA is off 8 points, trading at 38,272. Corn and soybean futures were under pressure overnight by a stronger US Dollar, a forecast that calls for much needed precipitation in Argentina late next week, and struggling export demand on the cusp of a large South American harvest. The aforementioned issues have been dragging on corn and soybean futures all week, however, before you give up and jump off the silo, there is some good news! The air is ripe for a recovery rally. Futures are technically oversold, the funds are holding massive, unsustainable short positions (especially in corn), and the charts are exhibiting bullish divergence. The question is not IF there will be a meaningful rally, but WHEN? This morning, USDA released the weekly Export Sales Report. Weekly soybean sales bookings were extremely disappointing while weekly corn sales bookings were decent. Last week, 1,206,700MT of corn was booked for sale for the current marketing year. This figure is on the upper end of the range of trade estimates, is 26% higher than the previous week’s sales, and is 58% higher than the prior four-week average. Last week’s corn export shipments totaled 911,400MT. This figure is 2% lower than the previous week’s shipments and is even with the prior four-week average. Primary destinations were Mexico, Japan, China, Colombia, and Canada. Last week, 164,500MT of soybeans were booked for sale for the current marketing year. This figure is a marketing-year low, is over 300,000MT below the lowest trade estimate, is 71% lower than the previous week’s sales, and is 64% lower than the prior four-week average. Last week’s soybean export shipments totaled 949,900MT. This figure is 15% below the previous week’s shipments and is 18% below the prior four-week average. Primary destinations were China, Egypt, Mexico, Spain, and Japan. Yesterday, the funds were net even on corn, bought 2000 contracts of soybeans, and sold 5000 contracts of wheat. They are now estimated to be net short 276,470 contracts of corn, net short 102,390 contracts of soybeans, and net short 72,345 contracts of wheat. From a chart perspective, March corn finds initial support at 4.4350 and 4.4325, the lows from overnight and yesterday, respectively, followed by the contract low charted on Tuesday, 4.3650. Initial resistance is at 4.4875, the high for the week charted yesterday, followed immediately by 4.50, and then 4.5325, the three-week high charted one week ago. March soybeans find initial support at 12.0725 and 12.0675, the lows from overnight and yesterday, respectively, followed by the psychological 12.00 mark, and then 11.8775, the nearly eight-month low charted on Tuesday. Initial resistance is at 12.23, the high for the week charted yesterday, followed by 12.4750, the three-week high charted one week ago, and then 12.50. Opening calls are lower.
Have a great Thursday.