March corn futures finished the first week of the year up ¼ of a cent, trading in a range of 4 ½ cents over the four sessions. Fridays Commitment of Traders report showed that funds bought back 8,957 contracts, reducing their net short position to 189,536. This was the second consecutive week that funds reduced; three is a trend. The focus this week will be on Fridays USDA report, we will be compiling estimates and making those available by midweek. On the technical side of things, the market has been in a narrow range for several months. We have been in the camp of playing a nickel on either side o f 350 until we get a new fundamental catalyst to give us a breakout or breakdown. First technical resistance for Mondays trade will come in at 354 ½. Until we see consecutive closes above, bullish expectations should be tempered. If the market can achieve a conviction close above, we could see short covering from funds to 359 ¼-360 ½. This pocket represents a key Fibonacci retracement, the December 4th highs, and the 100-day moving average.
March soybeans finished last week’s session up 7 ¼ cents, trading in a range of 18 ¼. Fridays Commitment of Traders report showed funds sold 16,457 futures, extending their net short position to 87,834 futures. This is the most bearish they have been sine June/July (where we bottomed). As with the other grain markets, the focus this week will be on Fridays USDA report which will be released at 11am cst. We will continue to compile estimates and have those for you by midweek. Technically speaking, the market has stabilize well following a dramatic uninterrupted 68 cent meltdown in December. Significant resistance comes in from 985 ½-990. This pocket represents the 50 and 100 day moving average, as well as the 50% retracement from the June lows to July highs. If the market can achieve consecutive closes above this pocket, we expect to see short covering from the funds get us back above the $10 handle.
March wheat futures finished last week’s trade up 7 cents, trading in a range of 9 ½. Fridays Commitment of Traders report showed funds bought back 16,537 futures, reducing their net short to 135,523 contracts. Cold and dry weather have helped support prices, but it will still be a while longer before we see the true effects of that. Seasonally, this is a weak time of the year for wheat futures; we sent out a 15-year seasonal statistic in last week’s report referencing that. We have been referencing the 50-day moving average for months now as key resistance. The market is lingering right around it as we were not able to see a convincing trade above it yet. If we start to see consecutive closes above, we could see short covering towards 447 ¼. We are tempering the expectations and siding with the seasonal trend and looking at the sell side at these levels.