December corn futures made new lows early this morning, trading to its lowest level since September of 2021 as funds continue to grow their net short position to the largest since August of 2020, about 135k contracts. Despite the weakness early on, futures were able to snap a 3-day losing streak with the December contract settling 4 ¾ cents higher to 476 ¼. How much more downside is left is the question we get repeatedly. With where things are right now, we see a scenario where we settle into a range bound trade 15-cents on either side of 470. With harvest only 9% complete, potentially updated yields from the fields would be a catalyst to get the market moving in wider ranges. As it stands, volatility is still near its lowest levels since Spring, this does make options more appealing for traders and hedgers alike, whether it be to manage risk or take an outright position.
Soybeans broke below the 200-day moving average yesterday which opened the floodgates for continued selling pressure overnight, taking prices within pennies of our next downside support pocket, 1300-1304. At the close November soybeans were 1 ¼ cent lower, settling at 1315 ¼. The fact that the Bulls were able to defend this pocket sparked some intraday consolidation, but the Bulls need to get back out above 1330 to negate yesterday’s breakdown. A retest and failure at $13.00 could lead to a retest of the August 8th low and 50% retracement, which both come in from 1280-1282. If the market were to break to this pocket we would likely view it as a buying opportunity on the first test. Historically we’ve seen seasonality suggest weaker into the first week so we are hesitant to get too bulled up at this point.
Wheat continues to be like the Nebraska Corn Huskers and/or the Chicago Bears, disappointing, but disappointing to the extent that you’re almost numb to it. At the close December wheat futures finished the day 7 ¼ cents lower settling at 584. Low stocks to use numbers coupled with seasonal tendencies seem like friendly catalysts, but that hasn’t stopped the funds from selling into any relief rally. A close above 610-615 is the level we want to see the market get back out above, that could be the trigger to start a bigger wave of short covering.
December live cattle made new highs in the early morning trade but reversed to finish the session 52 cents lower to 190.47. The past two sessions have only done enough damage to erase Friday’s gains.
October feeder cattle futures finished the day 1.60 lower. The last two sessions have basically erased all of last Thursday and Friday’s gains. If the selling persists, the 50-day moving average would be a potential support level to keep an eye on, that comes in at 253.71.
On the snout side, December lean hogs were the big winner, settling 1.82 higher to 76.25. All in all, though, this market is largely directionless in-between 71(ish) and 77(ish).