Corn futures continue to hold ground while soybeans test MUST HOLD support. Will the ratio between the two start to narrow?
Corn
News
- Ukrainian farmers have started the 2023 corn harvest, agriculture ministry data showed on Friday. The ministry has said Ukraine is likely to harvest 56.4 million tons of grain this year, up from 55.3 million tons in 2022. -Reuters
- Ukraine has started exporting grain via Croatian seaports, aiming to broaden its export routes while its Black Sea ports are blocked, a senior Ukrainian official said on Thursday. Ukraine’s main grain export route is usually via its deep Black Sea ports, but Kyiv has been looking for alternative routes since Russia invasion last year and Moscow’s decision to quit the Black Sea grain export deal in mid-July. -Reuters
- Weekly export sales are expected to come in from 400,000 – 1,000,000 metric tons.
Technicals (December)
Zero has changed on the corn front this week, which has lined up with our two-week thesis, that being this is an environment filled with short term opportunities for participants on both sides of the market. On a longer-term time frame the market may be building up energy for a bigger directional move. Next Tuesday’s USDA report could be the catalyst to spark that. Volatility hit a one month low this week which has made options more appealing. As mentioned in yesterday’s interview with Scott the Cow Guy, we wouldn’t be surprised to see corn hold its own and potentially outpace soybeans with the idea that the ratio between the two could start to come back in after reaching roughly 7-year highs.
Bias: Neutral/Bullish
Resistance: 497 1/2**, 502-506 1/2***, 518-525 3/4****
Pivot: 489-491
Support: 472-476****, 460-464 1/2**
Seasonal Tendencies
Below is a look at seasonal averages for December corn. The 5-year seasonal average suggests seasonal consolidation while longer term averages continue to trend lower into harvest.
Soybeans
News
- The Buenos Aires grains exchange on Thursday forecast Argentina’s 2023/2024 soybean crop at 50 million metric tons, more than double last year’s level and the most for five years.That came a day after Brazilian food supply agency Conab said Brazil should produce a record 154.6 million tons of soybeans and export almost 97 million tons in the 2022/23 cycle. -Reuters
- Weekly export sales are expected to come in from 1,400,000 – 2,000,000 metric tons.
- Argentina’s grains production for 2023/24 is expected to be higher than the previous season as the El Nino weather phenomenon is expected to bring rain to the area, the Buenos Aires grains exchange said on Thursday.The country’s 2023/2024 soybean crop is estimated at 50 million metric tons, the highest level of the last five years and up from the 21 million tons produced in the previous season. -Reuters
Technicals (November)
Soybean futures are living on the edge, testing trendline support and the 50-day moving average, both of which we’ve talked about since last week. A failure to defend support from 1350-1355 could open the door for long liquidation which would open the door for a potential decline to the 200-day moving average near 1331.
Bias: Neutral
Resistance: 1390 1/2-1392**, 1409 1/2**, 1428-1435****
Pivot: 1373-1381
Support: 1350-1355***, 1331**
Seasonal Tendencies
Below is a look at seasonal averages for November soybeans. Seasonal tendencies have shown consolidation into the middle of September, but that turns to weakness in the back half of the month.
Wheat
News
- Ukraine has started exporting grain via Croatian seaports, aiming to broaden its export routes while its Black Sea ports are blocked, a senior Ukrainian official said on Thursday. Ukraine’s main grain export route is usually via its deep Black Sea ports, but Kyiv has been looking for alternative routes since Russia invasion last year and Moscow’s decision to quit the Black Sea grain export deal in mid-July. -Reuters
- Australia’s wheat output is forecast to drop 36% from last year as dry weather curbs yields. The Australian Bureau of Agricultural and Resource Economics and Sciences trimmed its crop outlook by 800,000 metric tons to 25.4 million tons.
- Weekly export sales are expected to come in from 250,000 – 600,000 metric tons.
Technicals (December)
Wheat futures tested our pivot pocket yet again, but yet again failed. That remains intact from 608 1/4-612. The Bulls NEED to see a conviction close or consecutive closes above this pocket to encourage a bigger wave of short covering. The next upside target for the Bulls would be in the 640’s. On the flip side, 595-599 1/2 is what needs to be defended. A close below here would start to neutralize our bias.
Bias: Bullish
Resistance: 643 1/2-646 1/4****, 677 1/4-682 1/4***
Pivot: 608 1/4-612
Support: 595-599 1/2**
Seasonal Tendencies
Below is a look at seasonal averages for December Chicago wheat. We are inching closer to a seasonal low (based on historical tendencies). Will that play out again this year? TBD.
