It was a firm start to the week in the Sunday night trade, but selling in corn and beans has futures taking a softer tone this morning.
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Corn
Technicals (May)
May corn futures were able to defend 4-star support in Friday’s trade which may have helped aid relief back towards our pivot pocket from 441 3/4-444 1/2. If the Bulls can chew through and close above this pocket, we could see prices continue to towards the psychologically and technically significant 450 level. This level represents previous support from January and a breakdown point from the first week of February.
Bias: Bullish
Resistance: 447 1/2-450****
Pivot: 441 3/4-444 1/2
Support: 431 1/2-433 1/4*, 421-422
Fundamental Notes
- With nearly all of Brazil’s second crop corn in the ground, weather will be monitored closely.
- As we inch into spring, weather will have increasingly importance.
- Fund Positioning
- Friday’s Commitment of Traders report showed that Funds were net buyers of roughly 40.8k futures/options contracts, 37.5k of that being short covering. That trims their net short position to 255,928 contracts. For those wondering where prices are when Funds were that short on the way down, May corn was at 453 3/4 and Dec was at 477 1/4.
Seasonal Trends
(Past performance is not necessarily indicative of future results)
- Below is a look at price averages for December corn, using the 5, 10, 15, 20, and 30 year averages. Though we believe we can see prices firm from these levels, we would urge Producers to temper the expectations, given the current balance sheet.
Soybeans
Technicals (May
- May soybeans have hit a tidal wave of resistance near our resistance pocket from 1198-1205 1/2. This pocket is psychologically significant, but it also represents previously important price points and the 50-day moving average. We would not be surprised to see continued consolidation against this pocket. If the Bulls can chew through and close above this pocket, we could see additional short covering take prices near 1240. However, a continued failure and we could be right back at the 20-day moving average which was also old resistance, near 1161-1167.
Bias: Neutral
Resistance: 1198-1205 1/2, 1212 3/4-1216
Pivot: 1184-1188
Support: 1161-1167**, 1125-1130
Fundamental Notes
- Last week’s NOPA crush report came in at 186.194 million bushels, that was a new monthly record and a 12.6% increase year over year. The average estimate was for 178.06. Soy oil stocks were down 6.6% and hit a 9-year low for the date.
Fund Positioning
- Friday’s Commitment of Traders report showed Funds have officially ended their record selling streak which totaled 16 straight weeks! The recent report showed Funds were net buyers of about 17k contracts, 13k of which was short covering. That trims their net short position to 155,137 futures/options contracts. Broken down that is 56,290 longs VS 211,427 shorts.
Seasonal Trends
(Past performance is not necessarily indicative of future results)
Below is a look at price averages for November soybeans, using the 5, 10, 15, 20, and 30 year averages.
Wheat
Technicals (May)
May Chicago wheat is higher in the early morning trade, but the daily chart still looks highly questionable. The Bulls need to see consecutive closes back above 550-555 to spark a more meaningful relief rally. This pocket represents previously important price points and now includes the 20-day moving average. Bears remain in the driver’s seat until we see prices work back above there.
Bias: Neutral
Resistance: 563-570, 595 3/4-600, 608 1/2-611**
Pivot: 550-555
Support: 525**
Fundamental Notes
- Export cancelations from China have been the headwind as of late. Whether or not that trend stays alive this week is still TBD.
Fund Positioning
- Friday’s Commitment of Traders report showed funds were net sellers of roughly 13k futures/options contracts, 12k of which was long liquidation. Funds are now net short 78,870 contracts. For reference, they were net short 120k contracts in November.
Seasonal Trends
(Past performance is not necessarily indicative of future results)
- Below is a look at price averages for July wheat, using the 5, 10, 15, 20, and 30 year averages. Historically this isn’t the most friendly time of year.
