Grain markets are green to start the week (yes, you read that correctly!). Is there more upside left into March options expiration on Friday?
Corn
Technicals (March)
Corn futures are higher to start the shortened week, but many Bulls are likely hesitant to get too excited as the early morning trade has recently fallen flat once we enter the regular trading hours. Previous support from 422-425 will now act as the first hurdle of resistance. If the Bulls can chew through and close above this pocket, that could spur a little more excitement as it could trigger technical short covering back into the mid 430s. Friday’s is March options expiration which may also play a role in price action, likely favoring the Bull camp with loads of put options in the money.
Bias: Neutral/Bullish
Resistance:435-436 1/2, 450-453 1/4*
Pivot: 422-425
Support: 415-416
Fundamental Notes
- Dr. Michael Cordonnier left Brazilian corn crop estimate unchanged at 112 MMT.
- March options expiration is this Friday. If you’re still in March futures, you’ll want to consider rolling or exciting before the end of next week’s trade.
Seasonal Tendencies
(updated on Mondays)
Below is a look at historical seasonal averages for March corn futures (updated each Monday) VS today’s prices (black line).
*Past performance is not necessarily indicative of futures results.
Fund Positioning
(updated on Mondays)
Funds were net sellers of corn for the seventh consecutive week, expanding their net short position to a whopping 314,341 futures and options contracts. This is inching closer and closer to the record short position of 322,215 contracts, set in April of 2019.
Soybeans
Technicals (March)
March soybean futures were able to stabilize in Friay’s trade, working –their way back near our pivot pocket from 1175-1176. The market has been able to find some follow-through momentum to start the week, with prices trading as high as 1187 1/2 in the overnight trade. If the Bulls can defend the early morning strength through the regular trading hours, it could help spur a move back towards the technically and psychologically significant $12.00 level into this week’s options expiration.
Bias: Neutral
Resistance: 1198-1205 1/2, 1221-1223**, 1230-1235
Pivot: 1175-1176
Support: 1145-1157****
Fundamental Notes
- China is back from their Lunar New Year holiday which may spur more physical soybean trade activity.
- Dr. Michael Cordonnier cut his Brazilian soybean crop estimate another 2 MMT to 145 MMT, well below the current USDA estimate.
- March options expiration is this Friday. If you’re still in March futures, you’ll want to consider rolling or exciting before the end of next week’s trade.
Seasonal Tendencies
Below is a look at historical seasonal averages for March soybean futures VS this year’s price (black line), updated each Monday.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed Funds were net sellers yet again, extending the streak to 13 consecutive weeks, a new record. They are now net short 134,500 futures and options contracts, the fifth largest net short on record.
Wheat
Technicals (March)
March Chicago wheat futures made new lows for the move in the overnight session but have popped their head back into positive territory in the early morning trade. The market has shown the ability to defend support from 555-558 which were the previous lows from November 27th and 28th. From a risk/reward perspective this isn’t a bad setup to the buyside, whether that be covering shorts or initiating a new long. A break and close support would negate that thesis.
Bias: Neutral
Resistance: 595 3/4-600***, 608 1/2-611**
Pivot: 573-578
Support: 555-558****
Fundamental Notes
- The US Dollar is weaker in the early morning trade but remains near the highs of the year.
- March options expiration is this Friday. If you’re still in March futures, you’ll want to consider rolling or exciting before the end of next week’s trade.
Seasonal Tendencies
Below is a look at historical seasonal averages for March Chicago wheat futures VS this year’s price (black line), updated each Monday.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Managed Money continue to seem fairly comfortable with their position in wheat as there is yet again little change from the previous week. Funds are net short about 56k contracts, which as you can see from the chart below is fairly steady with where they’ve been for the better part of the last two months.
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