Corn and soybean futures had a weaker close on Tuesday which has led to follow-through pressure in the early morning trade. Where’s support?
Short dated options and new crop weekly options can be a great tool to manage risk or take a position ahead of tomorrow’s report. The shortened time frame can offer a more cost-effective way to manage risk. Feel free to reach out to our trade desk to discuss potential strategies.
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Corn
Technicals (May)
Yesterday’s continued failure against the 50-day moving (red line) average and break back below the 20-day moving average (blue line) has led to a decline in prices ahead of tomorrow’s report, taking us back to the breakout point from 3-weeks ago. A failure to defend 431-435 on a closing basis puts the Bears back in the driver’s seat with the next support pocket coming in about a dime lower, 421-422.
Bias: Neutral
Resistance: 441 3/4-444 1/2, 447 1/2-450*
Pivot: 431 1/2-435
Support: 421-422***
Fundamental Notes
- The range of intended corn acres comes in from 90.0-93.472 million acres, with the average estimate being near 91.8 million acres.
- Quarterly stocks estimates range from 8.129-8.568 billion bushels with the average estimate being 8.427. This would be 14% higher year over year and a 5-year high for this time of year.
- Markets will be closed on Friday in observance of Good Friday.
Fund Positioning
- Friday’s Commitment of Traders report showed that Funds were net buyers of roughly 13k futures/options contracts, the bulk of that being short covering. That trims their net short position to 242,988 contracts. Broken down that is 171,123 longs VS 414,111 shorts.
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 have retreated back to where we started the week, which happens to coincide with the 50-day moving average. This was previously resistance and will now act as support. The 20-day moving arrearage coupled with previously important price points come in just below that, offering a decent amount of support from 1175-1181.
Bias: Neutral
Resistance: 1212 3/4-1216, 1240 1/2, 1250-1252***
Pivot: 1198-1205 1/2
Support: 1175-1181, 1161-1167*
Fundamental Notes
- The average estimate for soybean acres comes in near 86.5 million. The range of estimates come in from 85.35-88.0.
- Quarterly stocks estimates range from 1.74-1.986 billion bushels, the average estimate being 1.828. If released it would be 8% higher year over year and a 2-year high for this time of year.
- Markets will be closed on Friday in observance of Good Friday.
Fund Positioning
- Friday’s Commitment of Traders report showed Funds were net buyers of roughly 7k contracts, nearly all of which was short covering. That trims their net short position down to 148,339 futures/options contracts. Broken down that is 56,166 longs VS 204,505 shots.
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)
What looked like a promising end to last week and start to this week has slipped away as prices have retreated back below our all-important pivot pocket from 550-555. This keeps the door open for a potential retest of the lower end of the range, near 525.
Bias: Neutral
Resistance: 563-570, 595 3/4-600, 608 1/2-611**
Pivot: 550-555
Support: 525**
Fundamental Notes
- The average analyst estimates for wheat acres come in near 47.3 million.
- Quarterly stocks are estimated to be near 1.044 billion bushels. this would be an 11% increase year over year and a 3-year high for this time of year.
- Markets will be closed on Friday in observance of Good Friday.
Fund Positioning
Friday’s Commitment of Traders report showed little change in the Funds net positioning, holding a net short of 80,570 futures/options contracts. Broken down that is 80,721 longs VS 161,291 shorts.
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.
