Grain Express 10/10/22
Posted: Oct. 10, 2022, 8:17 a.m.
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Tensions on the Rise
The war between Russian and Ukraine escalated over the weekend and this morning following an explosion on a Russian build bridge linking Crimea with Russia. That prompted Russia to retaliate by carrying out several missel strikes in Ukraine’s Capital city, Kyiv. This has put a bid in grain markets to start the week.
Harvest
This afternoon’s weekly crop progress report is expected to show corn harvest near 34% complete and soybeans near 46%. Once we get past the half-way point in harvest, attention will begin quickly shifting towards weather and crop development in South America, particularly Argentina and Brazil.
A Look at the Outside Markets
Equity markets started off weaker in the Sunday night trade but have rebounded to be only fractionally weaker as of writing this. Oil futures are down .5% and precious metals are down 1.5-2%. We would have thought that these markets would have shown more strength with the news out of Russia and Ukraine. CPI (Consumer Price Index) will be out Thursday; this report is a key barometer analysts use to gauge inflation.
Corn
December corn futures are working higher to start the week on the back of escalations in Russia and Ukraine. The move higher does little to change any of the near-term technical levels. First resistance remains intact from 698-700. If you’re bearish the market and just trading the chart, this would be a decent risk/reward setup to sell against. With that said, a break and close above this pocket could spark a bigger move, towards the July 21st gap, 725 ¾-728 ¼. If the Bears can defend resistance, we could see prices come back in towards the low end of the recent range, which also comes in near the three major moving averages (the 50, 100, and 200 day).
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Soybeans
In Friday’s Grain Express we moved our bias from outright Neutral to outright Bullish. Nothing that the gap from July 26th was close enough to being filled, we also mentioned this in Thursday’s interview with RFD-TV that we sent out to clients. $14 is psychologically significant, but the more technically significant pocket comes in from 1407 ½-1415 ¾. If the market were to make it back to this area, we would likely start to neutralize our bias some and encourage clients with long positions to be reducing.
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Wheat
December wheat futures tested were on the verge of a breakdown below technical support last Thursday and Friday but were saved by an escalation in war over the weekend. Wheat is up near 40 cents and testing the 200-day moving average and our pivot pocket, 913-923. If the Bulls can chew through this pocket, we could see an extension towards 960.
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