Closing Comments
Lynn Miller
February 2nd, 2016
Well, no shadow today so, the dude is safe for this year. Here’s to an early spring!
Corn:
Corn ended higher and near session highs with funds being net buyers. Some think this is seasonal short covering before a weather market. The talk out there is an increased corn crop in Brazil, decreased crop in Argentina due to drought. Ethanol numbers out tomorrow expected to be lower with stocks still higher. Crude was down again today, many link this to the OPEC countries delay in talking about/implementing production controls as both US and world stocks continue to rise.
Technically, all three indicators remain bullish the March futures. We closed significantly over the moving average and the MACD remains in our favor; however, the stochastics are in major overbought territory at 92.22. With a close just slightly over the $3.72 resistance number, we are hoping we have moved support to $3.72. My next sales targets would be $3.79, $3.85 and $4.10 if we can retrace to our high on October 8th.
Soybeans:
A higher day in beans with buy stops hit again today over $8.88. Just as in corn, some believe this is a seasonal short covering ahead of a weather market. But, I don’t know just how set on a weather market the funds are as it appears they covered short futures and sold puts. Maybe a move to hedge risk?
Technically, all three indicators remain bullish the March futures. With a close over $8.82, nearby support has moved up. My selling targets have moved up a notch to $8.90, $9.00, $9.12 then $9.35 if you really want to reach.
Wheat:
Short covering in corn and beans buoyed wheat today, helping to hold near unchanged. Continued weak world markets and no weather threats out there to speak of continue to hold us in this sideways trend. The Midwest’s blizzard today was even seen as favorable to bring spring moisture and protection for winter wheat acres.
Technically, all three indicators have turned bearish the Minneapolis March futures. Support gave way at the $4.98 area and has opened the door for a move back to contract lows at $4.83. If you need to make some wheat sales, a few bushels at $5.00 futures might not be a bad idea. My price targets would be 5.05, $5.10, $5.20, $5.28 and $5.39.
