Closing Comments
Lynn Miller
February 8th, 2016
Was the commodity sell off today pre-report positioning with the next USDA Supply and Demand report due out tomorrow at 11:00 am?
Corn:
Holidays in both China and Brazil reduced trade volumes today. Forecast rain in Argentina for the weekend became reality and the peso fell against the dollar. Corn ended lower and near the session lows. Talk that the world oil producers failed to reach an agreement on production controls over the weekend weighed on prices. Weekly exports were 17 million bushels vs. 28 last year.
Technically, two of three indicators are now bearish the March futures. The only indicator hanging on by its fingernails is the MACD. The stochastics have been in a straight line dive and are approaching oversold already. Support continues to hold at $3.62. My next sales targets would be $$3.72, 3.79, $3.85 and $4.10 if we can retrace to our high on October 8th.
Soybeans:
Crude oil was back below $30/barrel to weigh on prices, Argentina got weekend rains. Talk of a large US energy company facing bankruptcy surfaced today. Export loaded remained steady at 1.17 mmt reported. This had the market up early, but the negative pressure brought us right back down.
Technically, all three indicators are now bearish the March futures. The Stochastics have crossed into oversold territory. $8.66 wasn’t able to hold support today either as we continue to inch downward. We’ve now opened the door for a downward move to $8.52. My selling targets would remain $8.80, $8.90, $9.00, $9.12 then $9.35 if you really want to reach.
Wheat:
A general commodity sell-off today drug wheat lower with additional pressure from European futures. Weak world equity markets and continued lower world wheat prices are also negatives. Lack of 2016 weather concerns may be limiting buyer interest for now. Weekly export inspections were 15 million bushels vs. 15 last year.
Technically, all three indicators are once again bearish the Minneapolis March. $4.82 continued to hold today; however, a close below this level could open the door for $4.65. My price targets would be 5.05, $5.10, $5.20, $5.28 and $5.39.