MarketEdge AM Comments
Aug 25, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were higher overnight. September corn finished the overnight session up a half of a penny, settling at 4.7275. November soybeans were up 9 cents, settling at 13.8075. In the outside markets, as of 7:40am: The US Dollar Index is unchanged, trading at 103.984. October crude oil is up $1.03, trading at $80.08 per barrel. Precious metals are mixed. Industrial metals are mixed. The Electronic Mini-DJIA is up 144 points, trading at 34,284. Soybeans continue to be the upside leader with corn timidly following along. With an extremely tight soybean balance sheet and hot and dry weather threatening US production potential, it is obvious that soybean futures deserve some risk premium when compared to corn. Trading volume and open interest prove that traders are more keen to gamble on soybeans and leave corn pretty much alone at this time. The ProFarmer Crop Tour wrapped up its sampling in Iowa and Minnesota yesterday. As expected, forecasted corn yields for both states came in below USDA and below last year’s tour findings, however the deviation from last year’s tour wasn’t massive enough to cause alarm. Iowa’s ProFarmer corn yield estimate was one bushel per acre below last year’s tour and Minnesota’s was 9bpa below last year. ProFarmer will be out with their national yield estimates sometime today. Traders are anxious to see how their average yield estimates compare to USDA. Long story short, this year’s tour did not find a major disaster out there. There is certainly going to be a corn crop out there, albeit probably not a record breaker but it will be enough. Soybeans are another story. The jury is still very much out when it comes to forecasting soybean yield and production. Pod counts are one thing but what’s inside the pods is quite another. The recent hot and dry stretch across the Corn Belt certainly calls into question what will be inside those pods. Yesterday, the funds sold 2000 contracts of corn, bought 10,000 contracts of soybeans, and sold 3000 contracts of wheat. They are now estimated to be net short 79,625 contracts of corn, net long 80,190 contracts of soybeans, and net short 70,435 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, September corn faces initial resistance at yesterday’s high, 4.8050, followed by Monday’s high, 4.93, and then the three-week high charted on the 11th, 4.9475. Initial support lies at 4.70, the overnight low, followed by the two-year-plus contract low charted on Tuesday, 4.61. November soybeans face initial resistance at the new one-month high charted overnight, 13.8175, followed by the psychological 14.00 level, and then 14.35, the double-high from May 31, 2022, and July 24th which is the 15-month contract high. Initial support lies at 13.68, the overnight low, followed by 13.50, and then this week’s low charted on Wednesday, 13.3250. Opening calls are higher.
Have a great Friday and an even better weekend.
Good Morning. Corn and soybean futures were higher overnight. September corn finished the overnight session up a half of a penny, settling at 4.7275. November soybeans were up 9 cents, settling at 13.8075. In the outside markets, as of 7:40am: The US Dollar Index is unchanged, trading at 103.984. October crude oil is up $1.03, trading at $80.08 per barrel. Precious metals are mixed. Industrial metals are mixed. The Electronic Mini-DJIA is up 144 points, trading at 34,284. Soybeans continue to be the upside leader with corn timidly following along. With an extremely tight soybean balance sheet and hot and dry weather threatening US production potential, it is obvious that soybean futures deserve some risk premium when compared to corn. Trading volume and open interest prove that traders are more keen to gamble on soybeans and leave corn pretty much alone at this time. The ProFarmer Crop Tour wrapped up its sampling in Iowa and Minnesota yesterday. As expected, forecasted corn yields for both states came in below USDA and below last year’s tour findings, however the deviation from last year’s tour wasn’t massive enough to cause alarm. Iowa’s ProFarmer corn yield estimate was one bushel per acre below last year’s tour and Minnesota’s was 9bpa below last year. ProFarmer will be out with their national yield estimates sometime today. Traders are anxious to see how their average yield estimates compare to USDA. Long story short, this year’s tour did not find a major disaster out there. There is certainly going to be a corn crop out there, albeit probably not a record breaker but it will be enough. Soybeans are another story. The jury is still very much out when it comes to forecasting soybean yield and production. Pod counts are one thing but what’s inside the pods is quite another. The recent hot and dry stretch across the Corn Belt certainly calls into question what will be inside those pods. Yesterday, the funds sold 2000 contracts of corn, bought 10,000 contracts of soybeans, and sold 3000 contracts of wheat. They are now estimated to be net short 79,625 contracts of corn, net long 80,190 contracts of soybeans, and net short 70,435 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, September corn faces initial resistance at yesterday’s high, 4.8050, followed by Monday’s high, 4.93, and then the three-week high charted on the 11th, 4.9475. Initial support lies at 4.70, the overnight low, followed by the two-year-plus contract low charted on Tuesday, 4.61. November soybeans face initial resistance at the new one-month high charted overnight, 13.8175, followed by the psychological 14.00 level, and then 14.35, the double-high from May 31, 2022, and July 24th which is the 15-month contract high. Initial support lies at 13.68, the overnight low, followed by 13.50, and then this week’s low charted on Wednesday, 13.3250. Opening calls are higher.
Have a great Friday and an even better weekend.