A Mixed Start to the Week
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Corn
Technicals (March)
March corn futures attempted to rally in the back half of last week’s trade, but it seemed to lack conviction as the market struggled to get out above 450-452. This is hurdle #1 for the Bulls. A close out above here wouldn’t necessarily turn the tide, but it would start to neutralize some of the bearishness that has developed on the chart over the last three weeks. A continued failure at that pocket keeps the Bears in the driver’s seat.
Brazil Summer Corn Harvest 8.4% Done as of Jan. 19: Safras. Compares with 1.5% a year earlier and 5-year average of 5.8%, consulting firm Safras & Mercado says in report.
Corn prices in China extended their slide to the weakest level in more than three years on plentiful supplies, even after the state stockpiler pledged to buy the grain for reserves.
Bias: Neutral
Resistance: 460-462***
Pivot: 450-452
Support: 440-441**
Seasonal Tendencies
Below is a look at historical seasonal averages for March corn futures (updated each Monday) VS today’s prices (black line).
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed Managed Money (aka Funds) were net sellers for the third consecutive week, which expands their net short position to a whopping 260,542 futures and options contracts. This is the largest net short position since June of 2020, which grew to just over 300k short positions. In the year prior, 2019, Funds amassed a net short position of nearly 350k contracts. So yes, Funds do have a massive net short position, but they still have room to add with not much of a catalyst to cover (for now).
Soybeans
Technicals (March)
As with corn, March soybean futures made an attempt to recover lost ground in the back half of last week’s trade, but it hardly registered on the chart relative to the decline in prices we’ve seen over the last several weeks. $12.00 is the line in the sand that everyone and their dog will be watching this week. A failure to defend that on a closing basis could lead to more capitulation and a further decline in prices. On the resistance side, the Bulls need to get back out above 1230-1235 to breathe a little easier. This wouldn’t shift the trend back to bullish, but it would likely be enough to encourage more relief in prices.
Brazil 2023/24 Soy Harvest 6% Done as of Jan. 18: AgRural.
Compares with 2.3% a week earlier and 1.8% last year, according to a report from AgRural consulting firm.
Bias: Neutral/Bullish
Resistance: 1250-1260***, 1282-1285***
Pivot: 1230-1235
Support: 1200-1203***
Seasonal Tendencies
Below is a look at historical seasonal averages for March soybean futures VS this year’s price (black line), updated each Monday.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Managed Money (Funds) were net sellers of soybeans for the 8th week out of the last 9, putting them net short 78,827 futures and options contracts. This is the largest net short position since 2020. In 2019, they grew their net short position to about 171k contracts. So as mentioned with corn, Funds are very short, but it’s far from a record short.
Wheat
Technicals (March)
March Chicago wheat futures were able to have a decent back half of the week and still look the most technically and arguably fundamentally constructive of the grains. The Bulls still have some work to do to clear the way for higher prices, that starts with defending last week’s low of 573 1/4. On the resistance side, a close out above the psychologically significant $6.00 level could spark additional momentum.
Bias: Neutral/Bullish
Resistance: 608 1/2-611***, 618-622****
Pivot: 595 3/4-600
Support: 582-5845**, 570-573 1/2***
Seasonal Tendencies
Below is a look at historical seasonal averages for March Chicago wheat futures VS this year’s price (black line), updated each Monday.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed Managed Money being net sellers, expanding their net short position to 68,575 futures/options contracts.
Oliver Sloup, VP & Co-Founder, Blue Line Futures
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