Another quiet morning in the grain markets as corn, soybeans, and wheat futures linger near some important technical levels. Is the market building up energy for a bigger directional move?
Corn
News
- 2.2% of Argentina’s 2023/24 planned corn crop had already been planted and supported by the recent rain.Corn output is estimated at 55 million tons in 7.3 million hectares.Argentina is the world’s No. 3 corn exporter. -Reuters
Technicals (December)
More of the same in the early morning trade, which is consolidation. So far, the Bulls have been able to defend our 4-star support pocket from 472-476. A break and close below there could accelerate the selling pressure. The Bulls want to see consecutive closes back above 489-491 to encourage further technical momentum. Until then, we believe this is an environment filled with short term opportunities for participants on both sides of the market. Volatility is relatively low. We’ve been working with some clients this week to use them as an outright hedge, hedge against futures, or outright position (depending on the individuals needs and market bias). Feel free to reach out to our trade desk to discuss.
Bias: Neutral/Bearish
Resistance: 497 1/2**, 502-506 1/2***, 518-525 3/4****
Pivot: 489-491
Support:Â 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
SoybeansÂ
News
- The monthly NOPA report is scheduled for release at 11 a.m. CT. Estimates for the August 2023 crush ranged from 161.280 million to 171.000 million bushels. NOPA members, which handle about 95% of all soybeans processed in the United States, were estimated to have crushed 167.802 million bushels last month, according to the average of estimates from 10 analysts.If realized, the August crush would be down 3.2% from the 173.303 million bushels processed in July but up 1.4% from the August 2022 crush of 165.538 million bushels. It would also be the second-largest August crush on record, behind only 2019, when NOPA members processed 168.085 million bushels.The estimate implies a daily crush rate of 5.593 million bushels, which would be up slightly from 5.590 million bushels a day in July.The crush is typically near its lowest point of the year in August as processors idle plants for seasonal maintenance ahead of the autumn harvest and as supplies of soybeans from the prior season’s harvest are drawn down. -Reuters
Technicals (November)
The soybean chart is a fantastic example of previous support flipping into resistance (see white trendline on chart). The Bulls retraced the breakdown point from Tuesday’s USDA report, likely shaking out week shorts, only to retreat back lower in the early morning trade. A failure to close back above these resistance levels keeps the technical advantage in the Bears camp. The first downside objective would be our 4-star support pocket from 1330-1332 1/2, which was tested and defended earlier in the week. As mentioned in the corn section: Volatility is relatively low. We’ve been working with some clients this week to use them as an outright hedge, hedge against futures, or outright position (depending on the individuals needs and market bias). Feel free to reach out to our trade desk to discuss.
Bias: Bearish/Neutral
Resistance: 1373-1381***, 1390 1/2-1392**
Pivot: 1350-1355
Support:Â 1330-1332 1/2***
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
- Argentina’s 2023/24 wheat crop has been helped by recent rains in key agricultural areas, the Buenos Aires grains exchange said on Thursday, although western parts of the country are still parched.Argentina is a major global wheat exporter, and the exchange expects a harvest of 16.5 million metric tons this season.Following rains last week some 24% of planted wheat is in good or excellent condition, an increase of 5.7 percentage points versus the previous week, the exchange said in its weekly report. -Reuters
Technicals (December)
December Chicago wheat futures appear to be carving out a near term low, an emphasis on “near term”. We’ve seen these setups a lot over the last month, only to be a short-lived relief rally. The Bulls want to see a close back above 595-599 1/2 to help spark a move to 612-616. That’s the more significant barrier that the Bulls want/need to get out above.
Bias: Bullish/Neutral
Resistance: 612-616****, 643 1/2-646 1/4****
Pivot: 595-599 1/2
Support:Â 585-587, 507**
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.
