Wheat futures have been under heavy pressure for several months, but the KC contract is staging a nice reversal higher in the early morning trade. Is the low in?
I have Oliver Sloup on the line with us. He is with Blue Line Futures in Chicago. And Oliver, when you look at the green market activity here so far today, it just hasn’t really accomplished too much. Do you think this is just a function of the end of the month here or what are they waiting on?
Well, for corn, it’s just a function of the corn market. We’ve just been a stick in the mud for the better part of the last couple months, treading water right around 480 here this morning. And, you know, like I said, if you back out a couple of months, we’ve really been in the range, $0.20 higher than here and $0.20 lower.
And I wouldn’t be surprised to see that continue here into the near future. Now, when we do turn over the calendar, I think concerns are a little bit more bias to the downside that we could break below the low end of the range as harvest continues to wrap up and there might not be a whole lot of new news to keep the buyers ready, willing and able to support the market at these levels.
Right now, the commitment of trader support have been short about 100,000 contracts, which is more or less a drop in the bucket for I’m not a big position on the short side. So if demand continues to be lackluster, my concern is that they continue to pile on. And then if you look at some of the outside markets and the money flow there, if concerns continue to grow and mount there, potentially that spurs a risk off trade and commodities as well.
Well, with the Dow up 283 points today, that has to look a little more attractive on the equity markets than what the commodities do, at least for this morning anyway. All right. So let’s run through these. And on the corn, as you mentioned, we’re just about as flat as can be right now. We’re down a half cent on December and March is down three quarters of a cent, not doing much of anything on soybeans.
You currently have January down four and a quarter where 13, 15 and a quarter. That’s way off of its overnight high by $0.16. And now or within about a penny and a half of our low of the morning session here in Chicago, December wheat were down, a penny and a half were at 574 per bushel. In Kansas City, you have December now six and a quarter higher at 649 and a quarter.
Now, why the difference here between Chicago and Kansas City here this morning?
Well, Kansas City was lower in the overnight trade. A nice little reversal off those lows, which is which is pretty darn encouraging. And I’m hopeful that that can spill into the Chicago contract. And if we get to close out above 575, I think we could potentially see that Chicago contract make a retest and a run towards that psychologically significant $6 level on the back of short covering.
But it looks like Kansas City is going to have to do the heavy lifting to squeeze some of those shorts out of the Chicago contract and Friday’s commitment of traders report showed that bonds are still short about 92,000 futures and options contracts in that Chicago contract. So all eyes on that Kansas City contract, hopefully they can lead the week complex higher to start the week.
All right. So looking at Minneapolis, we’d hear on the spring week contract. We’re $0.04 higher this morning on that December futures contract for at 723 and three quarters. Now, let’s talk about the cotton. Also, we had the cotton this morning showing some signs of strength, even though it came off its overnight highs and then it disappeared. Right now, December cotton is down 41 points.
We’re at 83, 97 all over. That doesn’t look technical. All that great for the cotton if it couldn’t hang on to those overnight gains here.
Yeah, no, it does. And that’s going to be something we’re keeping a close eye on, is to hold those overnight gains. And we often say you got to take the overnight session with a bit of a grain of salt because the volume and the true market participation really doesn’t show up until those regular trading hours, which is where you get verification of the overnight move.
And we just haven’t gotten that in today’s trade. So they need to keep a close eye on that going forward.
One thing about a competing fibers are made from crude oil and you have the December crude now down $2.51. My goodness, 8303 for a barrel now there for a little bit. It lost the 83 handle and went down to 80 to 95. So down over two and a half dollars on the crude oil market right now. Very intriguing with all the war mongering going on in the Middle East right now.
I didn’t expect that one, but that could change any moment, too. You never know. We’ll be back and talk more with Oliver Sloup. We’ll take a look at our livestock trade in just a moment.
All of our everything perking up here in the livestock trade. Now, all of a sudden, as we start out the final couple of trading days of the month. What do you attribute that to?
what a difference a week makes, right? Last Monday, it was all doom and gloom in the in the livestock market, particularly in the cattle complex says we were kind of traded near limit down in some of those contracts but a big comeback late last week and a lot of that on the back of obviously a stronger cash trade coming out of the south down in Texas with bids at 185 186.
And that’s certainly propelling futures again higher this morning, which is encouraging to see. We’re right at last week’s gap and the hundred day moving average in that December live cattle contract that comes in at 183 and a half. And that’s going to be the line in the sand in today’s trade. If we can get a close out above there and cash stays strong, I think potentially we could see this market continue to recover some of last week’s early losses and make a run at 185.
I think that’s going to be the big inflection point for the market, whether or not we get out above there, I think is still to be determined. The one thing that we’re keeping a close eye on has been the fund position. We’ve talked about them holding a massive net long position basically since the beginning of spring. Well, last week’s Commitment trader’s report has them long, just 63,000 futures and options contracts.
So they have been liquidating that. That’s their smallest net long position since March. Potentially, if cash stalls out and starts to soften up, they continue to liquidate. But again, 185 is going to be the lines and to keep a close eye on going forward.
All right. Well, thanks for offering up those supporting resistance points and always good to know great information. And you have a good week trading out there. That’s Oliver Sloup of Blue Line Futures with us. He is reporting from Chicago. Suzanne, I hope you have your winter coat handy.
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