MarketEdge AM Comments
Nov 10, 2023
(Phil Knuth)
Good Morning. Corn and soybean futures were lower overnight. December corn finished the overnight session off a penny, settling at 4.67. January soybeans were off a half of a penny, settling at 13.43. In the outside markets, as of 7:45am: The US Dollar Index is off 70 points, trading at 105.842. December crude oil is up 79 cents, trading at $76.53 per barrel. Precious metals are all lower. Industrial metals are all lower. The Electronic Mini-DJIA is up 96 points, trading at 34,040. Yesterday’s WASDE Report continues to weigh upon corn and soybean futures this morning. Since the December WASDE Report usually features no changes to the corn and soybean balance sheets, the figures presented by USDA yesterday are the figures that the trade will have to work with until the release of the important January report. Going into yesterday’s report, average trade estimates called for minute changes to the balance sheets. Such was not the case when the report was published. Corn and soybean yield projections came out on the upper ends of the ranges of trade estimates. The large adjustment to the corn yield figure was most shocking to traders. USDA increased the corn yield estimate from 173bpa to 174.9bpa and increased the soybean yield estimate from 49.6bpa to 49.9bpa yesterday. Increases to some corn usage categories tempered the impact of the yield increase somewhat, resulting in the carryout projection only increasing by 45 million bushels, however, this was more or less a “solve for carryout” situation and the nearly 2bpa increase in yield was certainly a punch in the gut to the corn market. Soybean usage categories were left mostly unchanged and the carryout projection increased by 25 million bushels, to 245 million bushels. It is not all “doom and gloom” as we head into the last month and a half of the calendar year. South American weather concerns continue to offer plenty of support to soybean futures and though December corn futures took out the multi-year contract low charted in September yesterday, it was only by a penny and a quarter. So, there still appears to be some solid underlying support for corn futures. Yesterday, the funds sold 5000 contracts of corn, sold 8000 contracts of soybeans, and sold 6000 contracts of wheat. They are now estimated to be net short 151,140 contracts of corn, net long 35,120 contracts of soybeans, and net short 97,840 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, December corn finds initial support at the double-low charted yesterday and overnight that is also a new multi-year contract low, 4.6650. Support below this new low is thin. Initial resistance is at 4.69, the overnight high, followed by the 4.80 area. January soybeans find initial support at yesterday’s low, 13.36, followed by the psychological 13.00 level. Initial resistance is at 13.50, followed by the two-month high charted on Wednesday, 13.8450. Opening calls are lower.
Have a great Friday and an even better weekend.
Good Morning. Corn and soybean futures were lower overnight. December corn finished the overnight session off a penny, settling at 4.67. January soybeans were off a half of a penny, settling at 13.43. In the outside markets, as of 7:45am: The US Dollar Index is off 70 points, trading at 105.842. December crude oil is up 79 cents, trading at $76.53 per barrel. Precious metals are all lower. Industrial metals are all lower. The Electronic Mini-DJIA is up 96 points, trading at 34,040. Yesterday’s WASDE Report continues to weigh upon corn and soybean futures this morning. Since the December WASDE Report usually features no changes to the corn and soybean balance sheets, the figures presented by USDA yesterday are the figures that the trade will have to work with until the release of the important January report. Going into yesterday’s report, average trade estimates called for minute changes to the balance sheets. Such was not the case when the report was published. Corn and soybean yield projections came out on the upper ends of the ranges of trade estimates. The large adjustment to the corn yield figure was most shocking to traders. USDA increased the corn yield estimate from 173bpa to 174.9bpa and increased the soybean yield estimate from 49.6bpa to 49.9bpa yesterday. Increases to some corn usage categories tempered the impact of the yield increase somewhat, resulting in the carryout projection only increasing by 45 million bushels, however, this was more or less a “solve for carryout” situation and the nearly 2bpa increase in yield was certainly a punch in the gut to the corn market. Soybean usage categories were left mostly unchanged and the carryout projection increased by 25 million bushels, to 245 million bushels. It is not all “doom and gloom” as we head into the last month and a half of the calendar year. South American weather concerns continue to offer plenty of support to soybean futures and though December corn futures took out the multi-year contract low charted in September yesterday, it was only by a penny and a quarter. So, there still appears to be some solid underlying support for corn futures. Yesterday, the funds sold 5000 contracts of corn, sold 8000 contracts of soybeans, and sold 6000 contracts of wheat. They are now estimated to be net short 151,140 contracts of corn, net long 35,120 contracts of soybeans, and net short 97,840 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, December corn finds initial support at the double-low charted yesterday and overnight that is also a new multi-year contract low, 4.6650. Support below this new low is thin. Initial resistance is at 4.69, the overnight high, followed by the 4.80 area. January soybeans find initial support at yesterday’s low, 13.36, followed by the psychological 13.00 level. Initial resistance is at 13.50, followed by the two-month high charted on Wednesday, 13.8450. Opening calls are lower.
Have a great Friday and an even better weekend.