Closing Comments
Lynn Miller
December 30th, 2015
Corn:
Ethanol production was out today, a pleasant surprise with an increase of 17,000 barrels/day. And ethanol stocks were actually decreased 221k barrels this week. This is an impressive grind rate, especially considering the stressed margins. On a downer the EIA unexpectedly increased crude oil inventories by 2.6 million barrels vs. a trade estimated reduction. Despite the good ethanol news, a light volume day and bad news in the crude department brought corn to new lows today. Export sales due out tomorrow morning.
Technically, all three indicators continue to be bearish the March futures. The stochastics appear to be confused, once again in sell mode in oversold territory. Nearby support continues to hold at $3.61 even though we traded through it significantly early session. My selling targets would be $3.66, $3.70, $3.75, $3.82 followed by $3.92.
Soybeans:
Brazil’s Ag Economics department rated their crop today at 43% poor/very poor, 25% average and 32% good/excellent based on farmer surveys. The flooding along the border of Brazil, Argentina, Paraguay and Uruguay is the worst in 20 years. 38 municipalities in the soybean growing region of Rio Grande del Sul have been impacted. Yet, the crop estimate remains unchanged. This is why the trade is not willing to play the S. American weather card just yet. They still have about a 2 week window for their weather to straighten out before they are in dier straights.
The trading left some technical hopes with a higher high and higher lows today; however, the poor performance today of grain in general after good chart action yesterday, leaves me hoping to just maintain tomorrow so we can start the new year fresh on Monday.
Technically, all three indicators continue to be bearish the March futures. However, the stochastics have made a drastic upswing. We closed the gap left on the Sunday night trade and are closing in on the 10-day moving average. Nearby support continues to hold at $8.54. My selling targets would be $8.68, 8.77, $883, $8.90 then $9.12 and $9.34 if you really want to reach.
Wheat:
There is just nothing new in Wheat. The additional short-covering is the one hope we have out there at the moment. We need new news bad here, whether it’s a weather story or some crazy thing Putin does, we need a story to trade other than poor US exports, a strong dollar and huge stock piles around the world.
Technically, all three indicators are again bearish the March Minneapolis futures. The stochastics changed their mind and ended the day wanting to send a sell signal. Once again, we touched the 10-day moving average, but were unable to hold it at the close. Nearby support appears to have held today at $4.90. My price targets now would be $5.07, $5.17, $5.25 and $5.32.
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