MarketEdge AM Comments

Jan 12, 2024

(Phil Knuth)

Good Morning.  It is Report Day.  At 11am, USDA will release the biggest data dump of the year, including the highly anticipated January WASDE Report and Quarterly Grain Stocks.  Corn and soybean futures were higher overnight ahead of these key reports.  March corn finished the overnight session up a penny and a half, settling at 4.5925.  March soybeans were up 8 ½ cents, settling at 12.45.  In the outside markets, as of 7:40am:  The US Dollar Index is up 200 points, trading at 102.495.  February crude oil is up $2.22, trading at $74.24 per barrel.  Precious metals are all higher.  Industrial metals are all higher.  The Electronic Mini-DJIA is off 191 points, trading at 37,736.  Position-squaring ahead of an important government report and sharply higher crude oil futures supported corn and soybeans overnight.  Even if there is other news out there floating in the atmosphere this morning, it means nothing to traders.  All eyes are fixed on the clock for the stroke of eleven and the release of the WASDE Report and Quarterly Grain Stocks Report.  Why is the January WASDE Report so important when compared with other monthly supply and demand updates?  Many would argue that the January report is the most important monthly supply and demand report of the entire calendar year as it finalizes production figures for the current crop year.  On today’s report, traders expect very minor changes to acreage, yield, and production figures, however, as with any USDA report, one should not be too sure of oneself until the report is published.  The government loves surprises, so be prepared for anything!  Quarterly grain stocks will also garner quite a bit of traders’ attention.  The ranges of trade estimates for December 1st corn and soybean stocks are rather wide, so there could be some surprises there as well.  Basically, buckle your seatbelts and be prepared for what could be a wild ride at 11am!  Yesterday, the funds sold 3000 contracts of corn, bought 1000 contracts of soybeans, and sold 2000 contracts of wheat.  They are now estimated to be net short 205,950 contracts of corn, net short 23,870 contracts of soybeans, and net short 60,080 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 overnight low, 4.57, followed by the contract low charted on Tuesday, 4.5175.  Initial resistance is in the 4.60 to 4.6250 range, which includes the highs from every trading session this week including overnight, followed by the 4.70 area.  March soybeans find initial support at 12.37, the overnight low, followed immediately by the seven-month low charted on Tuesday, 12.34.  Initial resistance is at 12.50, followed by the 12.80 area, and then 12.9075-12.9675, the chart gap from last Tuesday.  Opening calls are higher.
Have a great Friday and an even better weekend.

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