MarketEdge AM Comments
Oct 02, 2023
(Phil Knuth)
Good Morning. Corn futures were slightly higher overnight while soybean futures were lower. December corn finished the overnight session up 2 ½ cents, settling at 4.7925. November soybeans were off 5 cents, settling at 12.70. In the outside markets, as of 7:30am: The US Dollar Index is up 380 points, trading at 106.553. November crude oil is up 45 cents, trading at $91.24 per barrel. Precious metals are all lower. Industrial metals are mixed. The Electronic Mini-DJIA is off 88 points, trading at 33,637. In the aftermath of Friday’s Quarterly Stocks Report, corn futures have found some support but, unfortunately, soybean futures continue to struggle. Friday’s report was friendly for corn and really not incredibly bearish for soybeans, however, since the soybean stocks figure exceeded traders’ expectations, it was an excuse to beat the heck out of soybean futures and corn futures reluctantly followed along. Not to say that other quarterly stocks reports are unimportant, but Friday’s report was in a class of its own since the September 1st stocks figures also serve as the final carryout figures for the previous crop year. Was USDA’s 268 million bushel soybean carryout figure really that bearish? The answer is obviously no, however, traders expected a number closer to 240, so this adds additional bushels to the 2023/24 carryin figure that the trade was not expecting. Normally, this slight of an increase to a carryin number would not necessarily be that big of a deal, but this year is different given the struggling export program. Brazil has ample supplies to take care of China and the rest of the world through at least the end of November at a discount to US values and low Mississippi River levels are throwing a wrench in the ability for the US to ship much of anything via the traditional Mississippi River system. On Friday, the funds sold 10,000 contracts of corn, sold 7000 contracts of soybeans, and sold 10,000 contracts of wheat. They are now estimated to be net short 169,670 contracts of corn, net long 17,930 contracts of soybeans, and net short 118,420 contracts of wheat. From a chart perspective, December corn finds initial support at 4.7550, Friday’s low, followed by last week’s low charted on Monday, 4.7375, and then the two-year contract low charted two weeks ago, 4.6775. Initial resistance is at the four-week high charted on Friday, 4.90, followed immediately by the high for the month of September charted on the 6th, 4.9025, and then 4.9950, the six-week high charted on August 29th. November soybeans charted a new three-month low overnight, 12.6575. That level now stands as initial support, followed by 12.5675, the 3 ½ month low charted on June 28th, and then 12.50. Initial resistance is at 12.7450, the overnight high, followed by the psychological 13.00 mark, and then 13.17, last week’s high charted on Wednesday. Opening calls are mixed.
Have a great Monday.
Good Morning. Corn futures were slightly higher overnight while soybean futures were lower. December corn finished the overnight session up 2 ½ cents, settling at 4.7925. November soybeans were off 5 cents, settling at 12.70. In the outside markets, as of 7:30am: The US Dollar Index is up 380 points, trading at 106.553. November crude oil is up 45 cents, trading at $91.24 per barrel. Precious metals are all lower. Industrial metals are mixed. The Electronic Mini-DJIA is off 88 points, trading at 33,637. In the aftermath of Friday’s Quarterly Stocks Report, corn futures have found some support but, unfortunately, soybean futures continue to struggle. Friday’s report was friendly for corn and really not incredibly bearish for soybeans, however, since the soybean stocks figure exceeded traders’ expectations, it was an excuse to beat the heck out of soybean futures and corn futures reluctantly followed along. Not to say that other quarterly stocks reports are unimportant, but Friday’s report was in a class of its own since the September 1st stocks figures also serve as the final carryout figures for the previous crop year. Was USDA’s 268 million bushel soybean carryout figure really that bearish? The answer is obviously no, however, traders expected a number closer to 240, so this adds additional bushels to the 2023/24 carryin figure that the trade was not expecting. Normally, this slight of an increase to a carryin number would not necessarily be that big of a deal, but this year is different given the struggling export program. Brazil has ample supplies to take care of China and the rest of the world through at least the end of November at a discount to US values and low Mississippi River levels are throwing a wrench in the ability for the US to ship much of anything via the traditional Mississippi River system. On Friday, the funds sold 10,000 contracts of corn, sold 7000 contracts of soybeans, and sold 10,000 contracts of wheat. They are now estimated to be net short 169,670 contracts of corn, net long 17,930 contracts of soybeans, and net short 118,420 contracts of wheat. From a chart perspective, December corn finds initial support at 4.7550, Friday’s low, followed by last week’s low charted on Monday, 4.7375, and then the two-year contract low charted two weeks ago, 4.6775. Initial resistance is at the four-week high charted on Friday, 4.90, followed immediately by the high for the month of September charted on the 6th, 4.9025, and then 4.9950, the six-week high charted on August 29th. November soybeans charted a new three-month low overnight, 12.6575. That level now stands as initial support, followed by 12.5675, the 3 ½ month low charted on June 28th, and then 12.50. Initial resistance is at 12.7450, the overnight high, followed by the psychological 13.00 mark, and then 13.17, last week’s high charted on Wednesday. Opening calls are mixed.
Have a great Monday.