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Yesterday’s Close: March corn futures finished yesterday’s session up ¼ of a cent, trading in a range of 3 ¾ for the day. Funds were estimated buyers of 5,000 contracts for the session.
Fundametnals: Yesterdays weekly EIA report showed ethanol production at 1.016 million barrels per day, this was down from the 1.057 million barrels we saw in the previous week. There was an export sale of 123,000 metric tons to “unknown” for the 2017/2018 marketing year. This morning’s export sales came in at 1,974,500. The expected range was for 1,000,000-1,500,000 metric tons; last week’s came in at 1,769,600 metric tons. Weather and crop developments continue to be watched very closely in Argentina as concerns still linger. Brazils first crop is estimated to be 17% complete which is close to in line with last year’s pace. Producers are starting to get active on some sales as December new crop futures approach the $4 handle.
Technicals: Lack of new news and conviction from the bulls or the bears has the market treading water at the top end of resistance. Our resistance pocket from 366 ½-369 continues to hold, but bears want to see more of a rejection against this pocket to encourage more pressure. The more times a technical lever is tested, the less significant it becomes (like a wrecking ball against a building). If the bulls can achieve a breakout we expect to see additional short covering from funds press prices towards 373-374 ¼. First significant support comes in from 357-358 ½.
Resistance: 366 ½-369****, 373-374 ¼***
Support: 357-358 ½**, 350-352 ½***, 345-346 ½***
Yesterday’s Close: March soybean futures finished yesterday’s session up 6 ¼ cents, trading in a range of 13 ½ cents for the day. Funds were estimated buyers of 8,500 contracts.
Fundamentals: Weather in Argentina continues to be the dominate catalyst as drought concerns have kept a premium in the market. There are some areas that are expecting rain over the weekend, but similar forecasts have fell short of expectations in recent weeks. NOPA crush numbers will be released at 11 am cst this morning. The average estimate is for 165.51 million bushels; this would be a record for the month of January and one of the largest numbers on record. Soybean meal has been on fire which has also helped the bean market. Some traders are waiting for a top in that market as a point to look short beans. Export sales this morning came in at 640,400 metric tons. The expected range was from 450,000-750,000 metric tons; last week’s came in at 743,200 metric tons.
Technicals: The market continues to grind higher and squeeze shorts who are trying to step in its way. The move out above 1006 opened the door for a move to our next resistance pocket which we have outlined as 1020-1027. The market has been strong posting higher lows and higher highs but is approaching its most overbought level in several months; the RSI (relative strength index) is currently at 67.25. If the market is able to break out above resistance, there are nearly no technical roadblocks until 1044 ¾-1050 ¾. Previous resistance now becomes first support from 1001-1006.
Resistance: 1020-1027***, 1044 ¾-1050 ¾****
Support: 1001-1006***, 986 ¼-989 ¾***, 980 ½-981 ½**
Yesterday’s Close: Wheat futures finished yesterday’s session down 4 ½ cents, trading in a range of 7 for the day. Funds were estimated sellers of 4,500 contracts.
Fundamentals: Wheat prices are in a bit of a limbo as market participants wait for new news to cross the wires. The drought concerns for areas of the plains have helped provide a premium to the market. Some of those areas are expected to get some moisture in the near future which could put pressure on prices. Currency volatility continues and that could start to have more of an effect on exports going forward. Export sales this morning came in at 311,100 metric tons. The expected range was for 200,000-450,000 metric tons; last week’s came in at 393,400 metric tons.
Technicals: The market has been in consolidation mode for the better part of the last week as the bulls and bears wait for a reason to do something. The bulls are in control on the chart as they have continued to market higher lows and higher highs. First technical resistance continues to come in from 470 ¾-472 ¾. A breakout above this pocket opens the door to 481 ¼-484 ¾. On the flip side, we see first support a way away from 438 ¾-441 ¾. Needless to say, the market is in a bit of a “no-mans” land here.
Resistance: 470 ¾-472 ¾***, 481 ¼-484 ¾****, 507 ¾**
Support: 438 ¾-441 ¾***, 427 ¼-429 ¾***
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