Morning Commentary

Dec corn down ¾ at $3.73

Nov beans down ¼ at $8.6725

The DOW is up

USD is weaker

Crude oil up $.48 at $71.82

Good morning,

Corn bulls are happy to see a stronger technical picture on the charts. The close in the DEC18 contract back above $3.70 per bushel was its first since August 21. The trade is eager to see if the momentum can continue as we approach much stronger resistance between $3.80 and $3.90 per bushel. Keep in mind, the market hasn’t been able to close back above $3.90 since early-June.  Technically, the trend is positive.   Momentum is strong.  The market is poised for a near term test of channel resistance (379.5 today).  A close under 361.75 warns of a setback.  System types are long risking 360.25.  Their smallest since Aug 21st, trend funds were short 81,000 corn on  a futures and options basis as of Oct 9th versus 95,000 the week prior.  In liquidation mode, I think trend followers would pause on a close below 361.75.

Soybean prices remain in a fairly narrow range despite harvest uncertainty with a portion of the U.S. crop. During the past few weeks, the NOV18 contract has oscillated between $8.40 and $8.75 per bushel. Despite last weeks late rally, we actually lost a couple of cents on the week. The U.S. balance sheet got a bit larger as some adjustments were made to last years numbers. The new-crop yield estimate was bumped higher to another all-time record at 53.1 bushels per acre, but total acres were lowered a touch to offset the yield gains. Net-net no real surprises to the U.S. balance sheet, just extremely burdensome at 885 million bushels. Global stocks are also at record levels. The short term technical trend is positive.  Having corrected it’s overbought condition, momentum is trying to turn up. A close over 872.5 should prompt a run to 890.  Closing under 849.25 warns of a setback.  System types are long risking 848.  Trend funds were short 102,000 beans on a futures and options basis as of Oct 9th versus 100,000 a week prior.  I think trend followers are risking 906.5.

South Korean buyers have turned to Pakistani ENA and REN industrial ethanol grades for late December to January delivery, as prices have dipped below those from Brazil following a rally in Brazilian ethanol prices. Offers of Pakistan ENA grade ethanol for November-December loading had fallen to $630/mt FOB Karachi. (Source: Platts)


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