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December corn futures closed 3 ¼ cents lower on Friday, trading in a range of 6 cents. With a good chunk of open interest in the 34-350 puts, we were expecting to see December option expiration to provide a little more support to the market. Due to Thanksgiving, the weekly Commitment of Traders report will be released on Monday. Estimates are for funds to be net short roughly 210,000 contracts, this compares with the previous week where they held a record short of 230,556 contracts. With December option expiration behind us, we will be focusing on the March contract. First technical resistance comes in at 361 ¼, this represents the 50-day moving average, an indicator we have not seen the market close above since July. If the bulls can achieve consecutive closes above, we could see the funds start to cover their short position. Until then, the bears remain in control as they have managed to continue the trend of lower highs and lower lows over the past several months.
January soybean futures finished Fridays session 4 ¾ cents lower, trading in a range of 8 ¾ cents. The market ran out of momentum in our resistance pocket from 999-1004 which led to some long liquidation into the weekend. If the bulls can achieve consecutive closes above this pocket, we could see funds extend their net long position and press the market towards 1021 ¾. Due to Thanksgiving, we will get the weekly Commitment of Traders report on Monday. Attention has shifted towards South American weather as they continue to plant an enter the crop development stage. Some weather models are suggesting a 70% chance of La Nina, this would lead to a drier December-February in the Southern parts of Brazil and Argentina.
December wheat futures closed 8 cents lower on Friday, trading in a range of 9 ¾ cents on the session. We continue to be bearish on the market as bears have been in total control for the past few months, posting lower highs and lower lows on a consistent basis. With December option expiration behind us, we will be focusing in on the March contract. First technical resistance comes in at 453 ¼, this represents the 50-day moving average, an indicator we have not closed above since July. The bulls will need to see a fundamental shift in supply and demand to encourage short funds to cover above this key technical indicator.
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