MarketEdge AM Comments
May 04, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were lower overnight. July corn finished the overnight session off 6 cents, settling at 5.8250. July soybeans were off 5 cents, settling at 14.1250. In the outside markets, as of 7:40am: The US Dollar Index is up 40 points, trading at 101.383. June crude oil is up 8 cents, trading at $68.68 per barrel. Precious metals are mixed. Industrial metals are higher, except aluminum. The Electronic Mini-DJIA is off 90 points, trading at 33,402. Corn and soybean futures were once again under pressure overnight after having rallied nicely yesterday and closing moderately higher. Concerns about the general global economy and inflation and rapid planting progress are inescapable bearish market forces that traders in Chicago continue to grapple with. Nevertheless, the chart performance of corn futures yesterday was indicative of a likely change in direction, at least for now. Yesterday’s short-covering rally in corn and soybean futures resulted in the July corn contract charting a bullish outside day key reversal. This occurs when the high and low of the day exceed the highs and lows of the last two trading sessions and the close is higher than the closes of the last two trading days. For technical traders, this signals that the trajectory of futures is about to change course to the upside and that the low, at least temporarily, has been charted. Historical analysis shows a track record of 70-80% probability that short-term price trends follow the direction indicated by either a bearish or bullish outside day key reversal. This morning, USDA released the weekly Export Sales Report. Although weekly sales bookings for corn and soybeans were certainly not impressive, they offered little/no surprise to traders as they were within the ranges of trade expectations. Last week, old crop corn cancellations outweighed new sales, resulting in a weekly net sales figure of -315,600MT. This figure is a marketing-year low and is down noticeably from both the previous week’s sales and the prior four-week average. For the 2023/24 marketing year, 121,000MT of corn was booked for sale to Mexico and other Central American destinations last week. Last week’s corn export shipments totaled 1,699,200MT. This figure is a marketing-year high, is 58% higher than the previous week’s shipments, and is 54% higher than the prior four-week average. Primary destinations were Japan, Mexico, China, Colombia, and Taiwan. Last week, 289,700MT of soybeans were booked for sale for the current marketing year. This figure is 7% lower than the previous week’s sales and is 78% higher than the prior four-week average. For the 2023/24 marketing year, 67,000MT of soybeans were booked for sale to China last week. Last week’s soybean export shipments totaled 561,200MT. This figure is 24% higher than the previous week’s shipments and is 12% higher than the prior four-week average. Primary destinations were China, Germany, the Netherlands, Mexico, and South Korea. Yesterday, the funds bought 5000 contracts of corn, bought 1000 contracts of soybeans, and bought 8000 contracts of wheat. They are now estimated to be net short 31,060 contracts of corn, net long 85,130 contracts of soybeans, and net short 120,160 contracts of wheat. From a chart perspective, July corn finds initial support at the overnight low, 5.8175, followed by the new 15-month low charted yesterday, 5.6925. Initial resistance is at 5.92, the overnight high, followed by the psychological 6.00 mark, and then 6.12, last Wednesday’s high. July soybeans find initial support at the overnight low, 14.1025, followed by the psychological 14.00 level, and then the new one-month low charted yesterday, 13.9225. Initial resistance is at 14.22, the overnight high, followed by 14.40, Tuesday’s high, and then 14.50. Opening calls are lower.
Have a great Thursday.
Good Morning. Corn and soybean futures were lower overnight. July corn finished the overnight session off 6 cents, settling at 5.8250. July soybeans were off 5 cents, settling at 14.1250. In the outside markets, as of 7:40am: The US Dollar Index is up 40 points, trading at 101.383. June crude oil is up 8 cents, trading at $68.68 per barrel. Precious metals are mixed. Industrial metals are higher, except aluminum. The Electronic Mini-DJIA is off 90 points, trading at 33,402. Corn and soybean futures were once again under pressure overnight after having rallied nicely yesterday and closing moderately higher. Concerns about the general global economy and inflation and rapid planting progress are inescapable bearish market forces that traders in Chicago continue to grapple with. Nevertheless, the chart performance of corn futures yesterday was indicative of a likely change in direction, at least for now. Yesterday’s short-covering rally in corn and soybean futures resulted in the July corn contract charting a bullish outside day key reversal. This occurs when the high and low of the day exceed the highs and lows of the last two trading sessions and the close is higher than the closes of the last two trading days. For technical traders, this signals that the trajectory of futures is about to change course to the upside and that the low, at least temporarily, has been charted. Historical analysis shows a track record of 70-80% probability that short-term price trends follow the direction indicated by either a bearish or bullish outside day key reversal. This morning, USDA released the weekly Export Sales Report. Although weekly sales bookings for corn and soybeans were certainly not impressive, they offered little/no surprise to traders as they were within the ranges of trade expectations. Last week, old crop corn cancellations outweighed new sales, resulting in a weekly net sales figure of -315,600MT. This figure is a marketing-year low and is down noticeably from both the previous week’s sales and the prior four-week average. For the 2023/24 marketing year, 121,000MT of corn was booked for sale to Mexico and other Central American destinations last week. Last week’s corn export shipments totaled 1,699,200MT. This figure is a marketing-year high, is 58% higher than the previous week’s shipments, and is 54% higher than the prior four-week average. Primary destinations were Japan, Mexico, China, Colombia, and Taiwan. Last week, 289,700MT of soybeans were booked for sale for the current marketing year. This figure is 7% lower than the previous week’s sales and is 78% higher than the prior four-week average. For the 2023/24 marketing year, 67,000MT of soybeans were booked for sale to China last week. Last week’s soybean export shipments totaled 561,200MT. This figure is 24% higher than the previous week’s shipments and is 12% higher than the prior four-week average. Primary destinations were China, Germany, the Netherlands, Mexico, and South Korea. Yesterday, the funds bought 5000 contracts of corn, bought 1000 contracts of soybeans, and bought 8000 contracts of wheat. They are now estimated to be net short 31,060 contracts of corn, net long 85,130 contracts of soybeans, and net short 120,160 contracts of wheat. From a chart perspective, July corn finds initial support at the overnight low, 5.8175, followed by the new 15-month low charted yesterday, 5.6925. Initial resistance is at 5.92, the overnight high, followed by the psychological 6.00 mark, and then 6.12, last Wednesday’s high. July soybeans find initial support at the overnight low, 14.1025, followed by the psychological 14.00 level, and then the new one-month low charted yesterday, 13.9225. Initial resistance is at 14.22, the overnight high, followed by 14.40, Tuesday’s high, and then 14.50. Opening calls are lower.
Have a great Thursday.