CORN (December)
Yesterdays close: December corn futures closed fractionally higher yesterday, trading in a three-cent range on the day. Funds were estimated to have been sellers of 2,500 contracts on the day.
Fundamentals: Searching for new news on the fundamental front during Thanksgiving week has proven to be difficult over the years and remains true this week. Harvest is all but complete here in the states and many market participants have ditched the screens early to spend time with family. We expect volume to dwindle through the rest of the week. Option expiration is Friday (an abbreviated session), we have been talking about this for the past week as a catalyst to offer the market support. 3.50 would look to be the magnet in terms of having the most open interest; a move here (and not above) would evaporate the most premium. South America will continue to be monitored closely as hey continue to plant and enter the developmental stages. Planting in Brazil is estimated to be 81% complete, this compares with the 92.4% we saw for the same time last year.
Technicals: The market is working on its fourth close higher, this would tie for the longest streak since September. The market has not seen five consecutive closes higher since July (at the top). 348 ½-350 will be a significant level going forward. This represents the 50-day moving average, something we have not closed above since July. It is also psychologically significant as well as the strike with the most OI (open interest). We still expect the market to move higher this week but are more curious to see how the market responds after expiration. If the market cannot maintain strength we could see a run back towards the lows. Keep in mind that once the options go off the board we will be rolling out to the March futures.
Bias: Neutral/Bullish
Resistance: 348 ½-350****, 355¼***
Support: 334-335 ½***, 323-325 ¼**
SOYBEANS (January)
Yesterdays close: January soybeans closed moderately lower yesterday, trading in a range of 5 cents on the session. Funds were estimated sellers of 1,500 contracts on the day.
Fundamentals: As mentioned with corn, searching for new news in a holiday week can prove to be challenging. There was a sale yesterday morning of 130,000 metric tons to China. Export sales will be delayed until Friday morning due to Thanksgiving. The Commitment of Traders report will be delayed until Monday. Attention will continue to be on South American weather and crop development as we look to round out the year. As of now, it does not appear that there are any significant concerns.
Technicals: Soybeans struggled to get anything going during yesterdays session, but the silver lining was holding key technical support form 979=984 ¾, this will continue to be significant support. ON the resistance side, 999-1004 ¾ is the pocket the bulls want to see a close above to encourage a run towards our intermediate term target of 1021 ½. With Thanksgiving less than 24 hours away, we are expecting to see a relatively quiet trade today with low volume. Volume confirms price so take price action with a grain of salt for the remainder of the week.
Bias: Neural/Bullish
Resistance: 999-1004 ¾**, 1014-1018**
Support: 979-984 ¾**, 968 ¼****, 957-963 ¼****
WHEAT (December)
Yesterdays close: December wheat futures closed higher yesterday, trading in a range of 8 ½ cents on the day. Funds were estimated buyers of 4,000 contracts on the session.
Fundamentals: Wheat has been struggling to find positive news (or any news for that matter) recently as the story of ample supply and sluggish demand continues to trump all and keep a lid on rallies. Export sales will be out Friday morning due to Thanksgiving tomorrow. The weekly Commitment of Traders report will be delayed until Monday.
Technicals: Technical indicators have started to trend sideways, but the bulls have a lot more work to do on the chart before getting excited. First technical resistance comes in from 434 ¼-436 ½, this pocket represents recent highs as well as the 50-day moving average. We have not closed above the 50-day moving average since July so we will use this as a level to sell against. Keep in mind that we will be rolling out to March futures next week with December options going off the board on Friday. First technical support for Dec futures come in from 416 ¼-418.
Bias: Bearish
Resistance: 434 ¼-436 ½**, 443****, 462 ¾**, 478-479****
Support: 416 ¼-418**, 399-402 ¾****, 390-392 ¼**
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