Corn futures are weaker while buyers step into soybeans over crop concerns in South America. Cattle futures opened higher but have pulled back to fill the gap, will it hold?
Oliver Sloup, VP & Co-Founder, Blue Line Futures**** AUTO-TRANSCRIBED ****
let’s sort this thing Oliver. So let’s talk about the grain side here first. Corn market, as kind of expected is just flat. I mean, it’s like there’s no interest at all. I would imagine the investment money in corn is probably going somewhere else right now. Yeah, absolutely. Especially with interest rates where they are, you’ve got to be looking for a return.
And looking at the corn market. We’ve just been a stick in the mud, trading sideways for what seems like an eternity now. And as he had mentioned earlier this morning, we got a flash sale, 104,000 metric tons of Mexico or 4.1 million bushels. That really wasn’t enough to get anybody excited. So the stick in the mud theme continues, and I wouldn’t be surprised to see that continue a little bit here over the next couple of days as it is a holiday week.
But keep in mind, we’ve got December option expiration at the end of the week, which is arguably the biggest options expiration for the corn market. So although it is a holiday week, there could be some volatility in the back half of the week as funds and money managers look to square things up ahead of options expiration. Now, soybeans, on the other hand, we’re starting to see the volatility pick up.
We’re in a 30% range to start the week. And last time we were in a 30% range over a 12 hour span, I can’t even remember. So it’s nice to see that market moving around. I think there are some upside potential 1325 to 1330. That was resistance back in September and October and eventual breakout point in November. We tested that in the overnight session.
We’re able to hold that. And I think with some weather concerns still mounting in South America, we could see this market kind of go retest those highs near $14. So we have 1349 and a half on January soybeans right now. But if I flip over to November of this coming year here, we’re at 1290 and a half and we’re up seven and a quarter today.
But there isn’t all that much to be gained by waiting that far out there. Yeah, Yeah, there really is. And right now, as I mentioned in the corn segment, it’s a holiday week. It’s probably going to be a little bit quieter for those back months. But looking at the month, futures, I think that’s where a lot of the volatility is going to be.
And until we get more clarity on what South America, Brazil in particular is able to produce, I think that you’re going to start to see this weather premium continue to be mounted in the market. Now, does that mean we’re going to go make new highs? No, not necessarily. Ultimately, I think we probably stay pretty rangebound between call it 1330 and $14.
And I think regardless if you’re at the lower end or the top end of that, that’s going to present some great opportunities for buyers and sellers alike. Okay, we’ll come back in a moment. We’ll take a look at the latest in our live stock market action That thing’s been chopping around today and we’ll take a look right after this.
Cattle market seems to be sliding here. Oliver, what’s up with that? The Friday Cattle on feed report, We were kind of in the camp that a neutral report could be a bullish reaction for the market because there were a lot of concerns that we were going to get another bearish surprise and it was fairly neutral, halfway friendly and we got the nice open.
But the fact that we weren’t able to hold a nice rally on the open from this morning is a little bit concerning, but I don’t know that the bottom’s going to continue to fall out of this market. I think there’s still pretty good fundamental backdrop here and I think we probably stay range bound for that February contract, 173 to 174 on the support side.
And then on the resistance side, we’re looking up at 179 180 is the inflection point that the bulls need to get out above to kind of re encourage some buyers to step back into the market. Looking at the commitment of traders report that we got Friday afternoon, they still manage money net long 41,000 contracts. If you recall, we spent much of the year between 80 and 100,000 contracts of 41,000 contracts net long.
That’s their smallest net long position since October of 2022. If we can stabilize here, we might have some buying power come back into the market. Interesting points. You bring up. Thanks, Oliver. Oliver Slope of blue line futures in Chicago. So, Suzanne, it looks like we have reached what they call a point of equilibrium. I like that.
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