Despite lower closes in corn and soybeans, grain bulls are leaving the floor with their heads held high. This morning saw flash sales for both wheat and corn to China for 2023/24 delivery. The sales totaled 220,000 MT of soft red winter (Chicago) wheat, and 265,000 MT of corn. Winning export business in any component of the wheat complex should be viewed as a win, and pushed the December wheat contract into a higher close for the second session in a row.
After recouping all of Friday’s losses in yesterday’s session, the December corn contract failed to settle above our 489-491 3-star resistance pocket. Even with today’s slightly lower close, the primary takeaway from the day’s price action is the continued resilience on the December corn contract. After coming under pressure early in this morning’s session, corn managed to rally back to close 3 ¼ cents off the low. For the day, December corn settled at 487 ½, down 1 ¼ cents. The foundation is set for corn to retest 3-star resistance between 489 and 491 tomorrow. A close above 491 tomorrow could set up a retest of 4-star resistance between 502 and 506 ½.
Today’s price action in the November soybean contract was very encouraging. After trading more than 9 ¼ cents lower in the overnight session, the contract managed to retest the June lows at 1256 ¾, and was a just tick inside of our 1247-1257 3-star support pocket from this morning’s Grain Express. Bulls defended 3-star support, sending the contract roaring back to close nearly 16 cents off the lows to close at 1272 ¼, down just 4 ½ cents. Today’s rally off the lows also corresponds well with a bullish seasonal kicking off shortly on the November soybean contract kicking off on October 6th. (call us for details!)
This morning’s flash sale to China was renewed hope that U.S. wheat is competitive on the global market. As such, December wheat managed to close higher for the second day in a row. While not as vigorous as yesterday’s rally, today’s 3 ¾ cent gain is further indication that the contract is attempting to hammer out a bottom here. As you’ve heard us say in the past, a market bottom isn’t necessarily a singular price – it’s a process. After Friday’s sharply lower close, and new low, following the Grain Stocks report, the December wheat contract has recouped a majority of those losses. With today’s close, we are close to approaching our 570 pivot point, and a close above 570 could set us up to retest 2-star resistance between 585-587.