Grain markets have been choppy this week as traders gear up for next week’s USDA report.
Oliver Sloup was on RFD-TV yesterday with Scott the Cow Guy, sharing his thought son the recent price action in the grain and livestock markets.Â
Weather in Focus – Blue Line Ag Hedge
Though it certainly doesn’t feel like it this week, we are inching our way closer to springtime, where weather in the U.S. will become more of a focal point for the grain markets. Here we look at current conditions, a 2-week outlook, and the National Weather Service’s 3-month outlook.
Corn
Technicals (May)
May corn futures failed to sustain momentum above the 50-day moving average and resistance in yesterday’s trade, which has put prices right back to where we’ve been for the bulk of the week. We wouldn’t be surprised to see a choppy trade into next week’s USDA report, which could present some great shorter-term opportunities for traders on both sides of the market. Also worth noting, today is April options expiration. It’s also the second day of March Madness, which as stupid as it sounds has been known to induce a holiday like trade from time to time.
Bias: Bullish/Neutral
Resistance: 447 1/2-450****
Pivot: 441 3/4-444 1/2
Support: 431 1/2-433 1/4*, 421-422
Fundamental Notes
- Weekly Export Sales Snapshot for Corn: Net sales of 1,185,800 MT for 2023/2024 were down 8 percent from the previous week, but up 10 percent from the prior 4-week average. This was within the range of expectations.
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 soybean futures made new highs for the move but failed to sustain that momentum through yesterday’s regular trading hours, which has turned over into weakness in the overnight and early morning trade. As mentioned yesterday, previous resistance will now act as support, that is being tested this morning from 1198-1205 1/2. A failure to defend this pocket could take us back near 1180.
Bias: Neutral/Bullish
Resistance: 1240 1/2, 1250-1252
Pivot: 1212 3/4-1216
Support: 1198-1205 1/2, 1175-1181*, 1161-1167
Fundamental Notes
- Weekly Export Sales Snapshot for Soybeans: Net sales of 494,000 MT for 2023/2024 were up 31 percent from the previous week and 86 percent from the prior 4-week average. This was within the range of expectations.
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 wheat futures continued to struggle against our pivot pocket from 550-555 which not only represents previously important price points, but now also includes the 20-day moving average. The US Dollar had a strong recovery yesterday which has led to additional strength this morning, this may be acting as a bit of a headwind for come commodity prices like wheat.
Bias: Neutral
Resistance: 563-570, 595 3/4-600, 608 1/2-611**
Pivot: 550-555
Support: 525**
Fundamental Notes
- Weekly Export Sales Snapshot for Wheat: Net sales reductions of 109,600 metric tons (MT) for 2023/2024–a marketing-year low–were down noticeably from the previous week and from the prior 4-week average. This was below the low end of expectations.
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.
