Corn futures traded to their lowest level since mid September as harvest pressure continues to weigh on prices. Cattle futures continued their rally, closing the gap with the cash market.
Oliver’s with Blue Line Futures and Oliver kind of started off the day a little bit firmer. Now are selling off in the corn market. Anything really to note about that?
Yeah. The corn market really can’t get anything going. And as you had mentioned, sell it off here into the afternoon session, trading to our lowest level since the middle of September. And if you would have told me that corn would be sinking lower with almost every other commodity rallying today, I would have thought you were crazy or at least would be, you know, trading near unchanged.
I don’t think this morning’s weekly export sales did any favors, which came in right at about 748,000 metric tons. That’s 45% below last week and 40% below the four week average. So not a whole lot to support the market there. And that’s really been a dark cloud over the corn market for for several months. So the bulls really need to get that switched around to have some hope of getting back towards that psychologically significant $5 handle and with that shot clock winding down in the December contract, and I’m sure that that’s going to allow enough time for the market to do that.
And my concern is that you start to see additional long liquidation from traders who don’t want to take delivery and that continue to pressure corn market here over the next couple of weeks in.
The December contract, as we go into first to stay at the end of this month. Now, is there anything out there that we might need to expect with window dressing farmers selling at the end of the year tax purposes? Is there anything that we kind of really need to know that might be out there that can move the corn market ten, 15, $0.20?
And that’s not really like anything about it?
Well, it sounds counterintuitive, but what usually sparks additional selling pressure is more selling pressure. People just kind of throwing in the towel and I think that’s what we’re concerned about here, heading in towards that option expiration and first notice day and that December contract, that’s certainly a big risk that’s still out there. And if we break in close below this four 7465 level, there’s not a whole lot of technical support either.
So that could really trigger some additional selling momentum from the funds who’ve started to accumulate a rather large net short position. So not a lot of optimism in the corn market. Soybeans, on the other hand, starting to look quite a bit more constructive there. So if you’re looking for a silver lining, I think that’s potentially where it’s going to be going forward.
You know, the fundamentals have been additional corn acres this year, lower corn acres and of beans. And that’s been very obvious in the spreads between the corn and soybeans. Do you see any kind of imposing factors that might keep that spread from continuing to widen, or is there really no limitations or protein choices out there that would keep that spread from just continuing to widen?
Well, with Harvest wrap it up here in the States, a lot of the jawboning is going to switch towards South America and what their crop is looking like down there. And obviously that’s added quite a bit of premium to the beans relative to the corn market here. As of late, we’re bumping our hand right up against a huge resistance levels.
We’ve got a resistance pocket that you could basically drive a truck through, but there’s a lot of significant price points between 13, 26 and 1336. And that January contract, including the 50 to 102 hundred day moving averages as well as the top end of the range from September. So as we talk about, you know, bearish technicals in the core market, there’s potentially some bullish technical setting up in that January soybean market.
If the bulls can chew through the top end of that range near 1336, I think that could invite and encourage some more momentum to the upside.
And we’ve seen that consolidation in the main market last couple of weeks there. So if you’ll stay with me all, we’re going to go away, take a quick commercial break
Oliver, I notice that our box beef had come down quite a bit from around the 313 314 area. Now we’re hugging around 301302. That doesn’t look very good, does it?
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