Weakness from the outside markets spill into grains following yesterday afternoon’s Federal Reserve meeting where rates were left unchanged, but Fed Chair Powell left more rate hikes on the table for futures meetings.
Corn
News
- Weekly export sales are expected to come in from 550,000-1,100,000 metric tons. Last week’s number came in at 753,298.
- Outside markets are weaker this morning following yesterday’s Federal Reserve meeting which ended with rates unchanged. However, Chairman Powell did indicate that more rate hikes could be necessary and that it’s too soon to say a soft landing has been achieved. This has acted as a headwind for commodities since the meeting was adjourned.
Technicals (December)
Corn futures were able to stage an impressive rally yesterday which was spurred by Tuesday’s reversal higher. If the Bulls can defend our pivot pocket from 472-476 that could be supportive for a retest of resistance from 489-491. However, a failure at the pivot pocket likely not only takes us to retest the recent lows but make new lows for the move. As mentioned in our AgDay TV interview on Tuesday, we see a trade of 15 cents on either side of 470 as the likely scenario as it stands.
Bias: Neutral
Resistance: 489-491***, 502-506 1/2***
Pivot: 472-476
Support:Â 460-464 1/2**
Seasonal Tendencies
Below is the updated look at historical seasonalities VS today’s prices (black line).
Soybeans
News
- Weekly export sales are expected to come in from 550,000-1,200,000 metric tons. Last week’s number came in at 703,862.
- Outside markets are weaker this morning following yesterday’s Federal Reserve meeting which ended with rates unchanged. However, Chairman Powell did indicate that more rate hikes could be necessary and that it’s too soon to say a soft landing has been achieved. This has acted as a headwind for commodities since the meeting was adjourned.
Technicals (November)
The market is making new lows for the week and testing the 100-day moving average which we’ve referenced every day this week. A failure to defend 1300-1304 likely opens the door for a retest of the August 8th low and 50% retracement from the May lows to the July highs, both of those points come in at 1280 and 1282. We would likely view that as an area of interest on the buy-side.
Bias: Neutral/Bearish
Resistance: 1350-1355***, 1373-1381***
Pivot: 1330-1332 1/2
Support:Â 1300-1304****
Seasonal Tendencies
Below is an updated 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
- Weekly export sales are expected to come in from 250,000-600,000 metric tons. Last week’s number came in at 473,850.
- The US Dollar is trading to its highest levels since March which may be acting as a headwind for commodities.
Technicals (December)
December Chicago wheat futures are little changed in the early morning trade, hovering right near our pivot pocket from 585-587. The Bulls want to see this pocket defended to have a shot at getting back near the psychologically significant $6.00 handle. The more technically significant area comes in from 612-616. That pocket has the potential to be a trend changer, if the Bulls can ever get out above there.
Bias: Neutral/Bullish
Resistance: 595-599 1/2***, 612-616****
Pivot: 585-587
Support:Â 570**
Seasonal Tendencies
Below is an updated 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.
