MarketEdge AM Comments

Jan 26, 2024

(Phil Knuth)

Good Morning.  Corn and soybean futures were lower overnight.  March corn finished the overnight session off 4 ½ cents, settling at 4.4725.  March soybeans were off 10 ¾ cents, settling at 12.1225.  In the outside markets, as of 7:40am:  The US Dollar Index is off 310 points, trading at 103.261.  March crude oil is off 86 cents, trading at $76.50 per barrel.  Precious metals are higher, except palladium.  Industrial metals are mixed.  The Electronic Mini-DJIA is off 63 points, trading at 38,147.  So much for the nice recovery rally in soybean futures!  Yesterday and overnight, all of the progress made Monday through Wednesday was erased.  Much like the rally, the sell-off lacks firm fundamental reasoning.  Although there is some concern regarding dry and hot weather in Argentina, the main driver for the rally in soybean futures earlier in the week was technical short-covering and bargain-buying.  Aside from disappointing soybean sales figures on yesterday morning’s Export Sales Report, the impetus for the profit-taking yesterday and overnight is unclear.  Overnight trading volume was heavy in soybeans and weaker in corn.  Such was also the case during the Monday-Wednesday rally.  Corn futures remain hopelessly range-bound, hovering above recent lows but unwilling/unable to stage any kind of meaningful rally.  Yesterday, the funds sold 1000 contracts of corn, sold 6000 contracts of soybeans, and bought 1000 contracts of wheat.  They are now estimated to be net short 268,650 contracts of corn, net short 81,830 contracts of soybeans, and net short 63,860 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, 4.4650, followed by the double-low charted on Monday and Tuesday, 4.44, and then the contract low charted last Thursday, 4.3675.  Initial resistance is at 4.50, followed by 4.5325, the two-week high charted yesterday, and then 4.60-4.6250, which contains the highs from everyday of the week of January 8th.  March soybeans find initial support at the overnight low, 12.1050, followed by the 7 ½ month low charted last Thursday, 12.01.  Initial resistance is at 12.3075, the overnight high, followed by 12.4750, the two-week high charted yesterday, and then 12.50.  Opening calls are lower.
Have a great Friday and an even better weekend.

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