Grain futures prices are mixed to start the week astraders and hedgers await new news from tomorrow’s USDA report.
USDA Report Estimates
Report out on Tuesday, September 12th
Corn
News
- Since 2004, corn yield landed outside the range of trade estimates only twice in September: 2018 and 2005.
- U.S. corn and soybean yields are usually lower in September versus August whenever the Midwest is sufficiently dry in August, though there were a couple dry Augusts that preceded higher September yields, including 2013 for corn and 2010 and 2011 for soybeans.September corn and soy yields have been lower than in August in three of the past four years, excluding 2021. -Reuters
- Friday’s Commitment of Traders report showed Funds were net sellers of 6,565 futures/options contracts through September 5th, expanding their net short position to 93,913 contracts. Broken down that is 174,807 longs VS 268,720 shorts.
Technicals (December)
December corn futures remain rangebound, keeping technical levels and our bias/thesis intact from basically all of last week. That thesis 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 last week which has made options more appealing.
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 (red line in chart below) suggests that the recent consolidation could start to turn into a market bottom. Longer term moving averages on the other hand suggest more weakness in the back half of September.
Soybeans
News
- Since 2004, soybean yield landed outside the range of trade estimates five times, the most recent being last September when yield surprised low.
- U.S. corn and soybean yields are usually lower in September versus August whenever the Midwest is sufficiently dry in August, though there were a couple dry Augusts that preceded higher September yields, including 2013 for corn and 2010 and 2011 for soybeans. September corn and soy yields have been lower than in August in three of the past four years, excluding 2021. -Reuters
- Friday’s Commitment of Traders report showed Funds were net sellers of 8,175 futures/options contracts through September 5th, trimming their net long position to 82,810 contracts. Broken down that is 115,366 longs VS 32,556 shorts.
Technicals (November)
November soybeans tested and defended our 3-star support pocket on Friday, we have outlined that as 1350-1355. A retest and failure of this pocket could open the door for long liquidation which would open the door for a potential decline to the 200-day moving average near 1331. On the resistance side, the Bulls want to get back above our pivot pocket from 1373-1381 to encourage another attempt at the $14 marker.
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 weakness through the back half of September for the 5, 10, 15, 20, and 30 year averages, illustrated in the chart below.
Wheat
News
- Chicago wheat lost ground on Monday, trading close to the last session’s 14-week low on pressure from abundant supplies from top exporter Russia and a lack of demand for U.S. cargoes.
- Friday’s Commitment of Traders report showed Funds were net buyers of 1,200 futures/options contracts through September 5th, narrowly trimming their net short position to 78,681 contracts. Broken down that is 64,165 longs VS 142,846 shorts.
Technicals (December)
Wheat futures made new lows on Friday and again in the early morning trade to start the week. The Bulls want to see consecutive closes back above $6.00 to potentially pause the selling. A break and close above resistance from 612-616 could be the catalyst to spark a bigger relief rally.
Bias: Neutral/Bullish
Resistance: 612-616****, 643 1/2-646 1/4****
Pivot: 595-599 1/2
Support: 585-587
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.
