MarketEdge AM Comments
Feb 16, 2024
(Phil Knuth)
Good Morning. Corn and soybean futures finished the overnight session steady/mixed. March corn was off a half of a penny, settling at 4.1725. March soybeans were up ¾ of a penny, settling at 11.63. In the outside markets, as of 7:45am: The US Dollar Index is up 300 points, trading at 104.592. March crude oil is off 36 cents, trading at $77.67 per barrel. Precious metals are lower, except gold. Industrial metals are mixed. The Electronic Mini-DJIA is off 127 points, trading at 38,731. While March soybean futures didn’t dare to revisit the fresh eight-plus month low charted yesterday overnight, March corn futures went ahead and charted a new contract low for third session in a row. What is going to stop this out-of-control freight train? Surely, there has to come a point where futures will stabilize and consolidate above charted lows, right? As short as the funds are, there has to be a short-covering rally at some point, correct? The answers you would expect or want to these questions I cannot deliver this morning. I wish there was some fresh friendly fundamental news that would stop the blood-letting and maybe even trigger a short-covering rally, however, as of this morning, there is nothing out there in the ether of that nature. Speculative selling continues and short positions keep piling on, driving futures lower and lower. Yesterday, preliminary balance sheets released from USDA’s Ag Outlook Forum did not help matters in the least. An extremely bearish outlook for the 2024/25 marketing year only further legitimized the recent behavior of futures. Someday, there will be a “Turnaround Tuesday.” Unfortunately, it does not look like that day is today. The Chicago Board of Trade will be closed on Monday in observance of Presidents’ Day. Trading will not resume until 7pm on Monday evening. All River Valley Coop offices will also be closed on Monday. Yesterday, the funds sold 3000 contracts of corn, sold 4000 contracts of soybeans, and sold 8000 contracts of wheat. They are now estimated to be net short 303,680 contracts of corn, net short 140,160 contracts of soybeans, and net short 82,320 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, March corn finds initial support at the new contract low charted overnight, 4.1650, followed by the psychological 4.00 mark. Initial resistance is at 4.20, the overnight high, followed by 4.3475, the high for the week charted on Tuesday. March soybeans find initial support at the eight-plus month low charted yesterday, 11.6025, followed by the contract low charted on May 31st, 11.4525. Initial resistance is in the 11.70-11.75 area, which includes the highs from yesterday and overnight, followed by the psychological 12.00 level. Opening calls are steady/mixed.
Have a great Friday and an even better weekend.
Good Morning. Corn and soybean futures finished the overnight session steady/mixed. March corn was off a half of a penny, settling at 4.1725. March soybeans were up ¾ of a penny, settling at 11.63. In the outside markets, as of 7:45am: The US Dollar Index is up 300 points, trading at 104.592. March crude oil is off 36 cents, trading at $77.67 per barrel. Precious metals are lower, except gold. Industrial metals are mixed. The Electronic Mini-DJIA is off 127 points, trading at 38,731. While March soybean futures didn’t dare to revisit the fresh eight-plus month low charted yesterday overnight, March corn futures went ahead and charted a new contract low for third session in a row. What is going to stop this out-of-control freight train? Surely, there has to come a point where futures will stabilize and consolidate above charted lows, right? As short as the funds are, there has to be a short-covering rally at some point, correct? The answers you would expect or want to these questions I cannot deliver this morning. I wish there was some fresh friendly fundamental news that would stop the blood-letting and maybe even trigger a short-covering rally, however, as of this morning, there is nothing out there in the ether of that nature. Speculative selling continues and short positions keep piling on, driving futures lower and lower. Yesterday, preliminary balance sheets released from USDA’s Ag Outlook Forum did not help matters in the least. An extremely bearish outlook for the 2024/25 marketing year only further legitimized the recent behavior of futures. Someday, there will be a “Turnaround Tuesday.” Unfortunately, it does not look like that day is today. The Chicago Board of Trade will be closed on Monday in observance of Presidents’ Day. Trading will not resume until 7pm on Monday evening. All River Valley Coop offices will also be closed on Monday. Yesterday, the funds sold 3000 contracts of corn, sold 4000 contracts of soybeans, and sold 8000 contracts of wheat. They are now estimated to be net short 303,680 contracts of corn, net short 140,160 contracts of soybeans, and net short 82,320 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, March corn finds initial support at the new contract low charted overnight, 4.1650, followed by the psychological 4.00 mark. Initial resistance is at 4.20, the overnight high, followed by 4.3475, the high for the week charted on Tuesday. March soybeans find initial support at the eight-plus month low charted yesterday, 11.6025, followed by the contract low charted on May 31st, 11.4525. Initial resistance is in the 11.70-11.75 area, which includes the highs from yesterday and overnight, followed by the psychological 12.00 level. Opening calls are steady/mixed.
Have a great Friday and an even better weekend.