MarketEdge AM Comments

Jan 18, 2024

(Phil Knuth)

Good Morning.  Corn and soybean futures were slightly higher earlier in the overnight session but finished the session steady/mostly unchanged.  March corn finished the overnight session off a half of a penny, settling at 4.4175.  March soybeans were up a quarter of a penny, settling at 12.06.  In the outside markets, as of 7:45am:  The US Dollar Index is off 20 points, trading at 103.431.  February crude oil is off 15 cents, trading at $72.41 per barrel.  Precious metals are higher, except silver.  Industrial metals are lower, except tin.  The Electronic Mini-DJIA is off 41 points, trading at 37,417.  Fresh news regarding grains and oilseeds is limited this morning.  Soybean futures attempted to rebound off of recent lows overnight and failed to follow through.  Futures appear to be “stuck in the mud,” still digesting Friday’s bearish report and under pressure from a demand standpoint.  Harvest has begun in Northern Brazil and those soybeans are making their way to market.  Current Brazilian values are at a $1.50 discount to US offers and there are plenty of rumors of the Chinese cancelling/switching US purchases to Brazilian origin.  Honestly, who can blame them when there is that big of a discount?  Speaking of Chinese demand, concerns about the Chinese economy, in general, but more particularly their hog industry, are giving traders the jitters.  China’s soybean crush margins are struggling, there is an oversupply of pork on-hand, and feed ingredient demand is in a slump.  The weekly Export Sales Report will be delayed until tomorrow morning due to Monday’s government holiday.  Yesterday, the funds sold 2000 contracts of corn, sold 6000 contracts of soybeans, and sold 1000 contracts of wheat.  They are now estimated to be net short 253,210 contracts of corn, net short 44,280 contracts of soybeans, and net short 72,750 contracts of wheat.  From a chart perspective, March corn finds initials support at the overnight low, 4.4125, followed immediately by the new contract low charted yesterday, 4.40.  Initial resistance is at 4.45, the overnight high, followed by 4.50.  March soybeans find initial support at the overnight low, 12.0375, followed immediately by the seven-month low charted on Friday, 12.03.  Initial resistance is at 12.1450, the overnight high, followed by the 12.50 area.  Opening calls are steady/mixed.
Have a great Thursday.

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