Closing Comments
Lynn Miller
January 5th, 2016
We had a nice rally going in the overnight session in true “Turnaround Tuesday’ fashion as the trade attempted to cover some short’s but the enthusiasm faded after the morning pause and we were only able to hold onto marginal gains.
Corn:
The CFTC commitment of traders report last night showed managed funds holding a larger net short position than expected. Other factors holding any rally in check were talk of record Dec 1 stocks in next week’s report, continued slow export demand and now talk of Argentina feed wheat making its way into the US. The scary part, is the US farmer is thought to hold the largest portion of US stocks and these bushels are unpriced.
Technically, all three indicators continue to be bearish the March futures. The stochastics have made a sharp move upward today nearing a buy signal. Nearby support continues to get pushed lower with new contract lows, sitting at $3.48 currently. My selling targets would be $3.56, $3.66, $3.70, $3.75, $3.82 followed by $3.92.
Soybeans:
Just as in corn, the market is expecting a record Dec 1 stocks number next week. Flooding and logistic issues on the river are firming basis to the south, this will be a short lived opportunity. Looking to South America, the Argentina farmer hasn’t hardly sold any beans from stocks, unlike we thought. Their currency, however, was down today which may help entice some selling. Argentina raised their new crop to 60.0 mmt and NE Brazil continued to get some much needed rains today.
Technically, all three indicators continue to be bearish the March futures. Nearby support continued to hold today back at the $8.47 level established on November 23rd. My selling targets would be $8.72, $8.80, $8.88, $8.95 then $9.12 if you really want to reach.
Wheat:
Wheat managed to buck the trend and close higher despite a stronger dollar today. Some feel we could be experiencing some consumer buying on the recent futures break to new lows. Despite the record short held by the funds, the negatives just don’t go away. There is too much wheat everywhere and crop conditions are improving daily.
Technically, two of three indicators remain bearish the March Minneapolis futures. The stochastics did issue a buy signal this afternoon and with an inside day we made up some ground back towards the 10-day average. Nearby support continues to hold at $4.78. My price targets now would be $5.00, $5.20, $5.28 and $5.34.
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