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Grain Futures Attempt to Rally 📉
Posted: Aug. 30, 2023, 8:12 a.m.
Corn
News
Renowned crop Consultant Dr. Michael Cordonnier lowered his estimated US corn yield 2 bushels per acre to 173 bpa.
Over the last 3-weeks we've seen soybeans rally nearly 7% while corn lost about 2.5%, pushing the soybean-corn ration to a 7-year high of 2.86.
Technicals (December)
December corn futures rejected the technically and psychologically significant $5.00 handle yet again in yesterday's trade, bringing prices back near our pivot pocket from 489-491. A failure to continue closing above this pocket opens the door for a potential retest of the low end of the range, 472-476. We are in the camp that a choppy sideways to lower trade will present some great opportunities for shorter term traders on both sides of the market.
Below is a look at seasonal averages for December corn. The 5-year seasonal average suggests seasonal consolidation while longer term averages continue to trend lower into harvest.
Soybeans
News
Tuesday Morning Flash Sale:
Private exporters reported the following sales activity:
246,100 metric tons (9,042,624 bushels) of soybeans for delivery to unknown destinations during the 2023/2024 marketing year
105,000 metric tons of soybean cake and meal for delivery to unknown destinations during the 2023/2024 marketing year
Renowned crop Consultant Dr. Michael Cordonnier lowered his estimated US soybean yield 1 bushel per acre to 50 bpa.
Over the last 3-weeks we've seen soybeans rally nearly 7% while corn lost about 2.5%, pushing the soybean-corn ration to a 7-year high of 2.86.
Technicals (November)
The Sunday night gap was officially filled last night and acted as support. The Bulls want to see that pivot pocket continue to hold on a closing basis. A break and close below could spark some long liquidation despite the friendly fundamental backdrop. The next support pocket below comes in from 1373-1381. The struggle to get out above $14 with conviction does make us a little cautious here midweek. If you're a producer who needs protection, you may consider looking in the options market as a way to establish a floor while keeping the upside open.
Bias: Neutral/Bullish
Resistance: 1409 1/2**, 1428-1435****
Pivot: 1390 1/2-1392
Support: 1373-1381****, 1350-1355***
Seasonal Tendencies
Below is a look at seasonal averages for November soybeans. We've noted in previous reports that seasonal tendencies suggest this is a time of year where the market attempts to consolidate and carve out a near term low.
Wheat
News
Statistics Canada estimated all-wheat production at 29.5 million metric tons, the second-lowest in eight years, and down 14% from last year. The estimate fell below the average industry expectation of 30.4 million. -Reuters
Production of spring wheat, used in baking, looked to fall 14.5% to 22.1 million tons. The harvest of durum wheat, used in pasta production, is expected to plummet 26% to 4.3 million tons. -Reuters
Technicals (December)
December Chicago wheat futures made new lows in yesterday's trade but have rebounded in the overnight and early morning trade. Is the bottom in? That will likely be a popular question this morning but it's important to remember that tops and bottoms are a process not a point and that there's a difference in a short-term low versus long term low.
Below is a look at seasonal averages for December Chicago wheat. The market is tracking the 15-year average the most closely (blue line), which suggests lower into the middle of September. The more recent 5-year average (red line) shows that consolidation has been happening earlier, which may help the market start to carve out a low against that May 31st low, 608 1/4.
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