A role reversal this morning with corn and wheat lower and beans trading into positive territory. These are the levels to keep an eye on in the final trading day of the week.
Grain Futures Take Pause After a Strong Start to the Week
Corn and wheat were leaders to the upside at the start of the week but fell back in today’s trading after failing against technical resistance. A healthy correction or more downside to come?
Corn
Technicals (December)
Corn futures failed against the previous day’s high in yesterday’s trade which led to weakness and a low range close. That has led to additional pressure in the overnight and early morning trade taking prices to test first support from 425-426 1/2. A failure here and a deeper retracement to 413 1/2-416 would be in the cards. On the resistance side, 433-435 continues to be the big hurdle to keep an eye on. Ultimately, we think we are in an environment that is more conducive to shorter term trades for participants on either side of the market.
Technical Levels of Importance
- Resistance: 441-443*
- Pivot:433-435
- Support: 425-426 1/2, 413 1/2-416, 408 1/2-409
Notes
Weekly Export Sales
Wheat: Net sales of 443,700 MT (16,303,179 bushels) for 2024/2025 were up noticeably from the previous week and up 46 percent from the prior 4-week average. This was near the top end of expectations.
Argentina
Corn planting in Argentina advanced to 13.7%. The Buenos Aires Grain Exchange noted that dryness has slowed the planting pace.
Volatility
As mentioned in yesterday’s interview with RFD-TV (and previous commentary), volatility is at levels that may make options more appealing whether that be for an outright position or as a hedge against a futures position. Below is a look at the CME Corn CVOL index which illustrates corn volatility over the last year.
Seasonal Tendencies
Below is a look at historical price averages for a wide range of time frames. What this illustrates to us is a tendency to carve out a harvest low through the first half of October. With harvest rolling on in the US, attention will continue to be more heavily weighted on crop progress in South America.
*Past performance is not necessarily indicative of future results.
Soybeans
Technicals (November)
November soybeans were under pressure yesterday but managed to defend the low end of our pivot pocket to a T, which we outlined as 1041 3/4-1042. A retest back to this pocket would likely be enough to break it lower with the next significant support coming in from 1031 3/4-1035. A failure there and the nearly two months of constructive price action would be at risk. On the resistance side, 1069 1/2-1069 3/4 is the pocket the Bulls want to get out above to spark another leg higher with the next upside objective from there coming in from 1082 1/2-1086 3/4.
Technical Levels of Importance
Resistance: 1069 1/2-1069 3/4, 1082 1/2-1086 3/4
Pivot: 1041 3/4-1042
Support: 1031 3/4-1035, 1023-1024 1/2**, 1000-1006 1/2
Notes
Weekly Export Sales
Soybeans: Net sales of 1,443,500 MT (53,039,530 bushels) for 2024/2025. This was within the range of expectations and above last week’s 1,319,000 MT.
Soybean Meal
The European Union moved to postpone a landmark law to tackle global deforestation. Traders had feared that the regulation would curtail imports of South American soymeal. -Bloomberg
Seasonal Tendencies
Seasonally the start of October can be a friendly time of year for soybeans but has the market front run the prospects of a harvest low? We saw a strong counter seasonal trend rally in the back half of September, some of which likely stemmed from Chinese stimulus and some minor weather concerns in Brazil.
*Past performance isn’t necessarily indicative of future results.
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