Volatility and Opportunity

Crop Insurance

2023 U.S. crop insurance price discovery results

• Corn $5.91/bushel (vs. $5.90 last year).  This would be the second highest base price on record.
• Soybeans $13.76/bushel (vs. $14.33 last year).  This would also be the second highest base price on record.

South American Crop Estimates

Dr. Cordonnier lowered production estimates in Argentina and Brazil.

• He lowered his Argentina corn estimate by 2 MMT, to 41 MMT, down from 43 MMT. 
• he lowered his Brazil corn estimate 2 MMT to 121 MMT, down from 123 MMT a week ago.

Black Sea Grain Deal

• Deadline: March 18th

Outside Markets

• Equity markets are fractionally higher, crude oil is $.70 lower to $76.35, and the US Dollar is lower by .60% after failing against resistance yesterday.  

Corn

Managed Money Position

Updated each Friday with the weekly CoT Report

• As of January 31st, Managed Money were net long 219,924 futures/options.  Broken down that is 285,287 longs VS 65,363 shorts.

Seasonal Trend in Play

• None

Technicals (May)

• May corn futures got taken to the woodshed yet again yesterday, taking out the December lows and trading to their lowest price since February 22nd.  For the month of February, May corn futures were 51 cents lower.  The RSI is approaching its lowest levels since July, which happened to be when we started to carve out a low.  There is some minor support near 620, but The July 26th gap from 595-599 1/2 is arguably the more significant pocket of support to keep on your radar.  Maybe the market doesn't make it down there this month, but it certainly got a lot more realistic.  We are moving our short-term bias from Bearish/Neutral to Neutral/Bearish.  Though corn is below some important technical levels, soybeans and wheat are defending their significant support pockets, if that continues it may offer some support to corn.  

Bias: Bearish/Neutral

Previous Session Bias: Bearish/Neutral

Resistance: 647 1/4-652 3/4****, 668 1/2-671 3/4**

Pivot: 636 3/4 

Support: 615 1/4-619 1/4**, 595 1/4-599 1/2****

Soybeans 

Managed Money Position

Updated each Friday with the weekly CoT Report

• As of January 31st, Managed Money were net long 175,504 futures/options.  Broken down that is 193,385 longs VS 17,881 shorts.

Seasonal Trend in Play

• July Soybeans have trended lower from February 24th-March 15th for 12 of the last 15 years.

Technicals (May)

• May soybeans joined the party of pain yesterday, after breaking and closing below trendline support in the previous session. In our commentary earlier in the week we noted that there was some psychological support near $15.00, but the more significant support pocket came in from 1472-1476.  Yesterday's low was 1477 3/4, keeping that pocket intact and moving our bias from Bearish Neutral to short term Neutral.  The market is rebounding in the overnight and early morning trade as Bulls hope March will bring better prices.  For the month, May beans were 51 1/4 cents lower.  Previous support is now resistance, that comes in from 1507-1512.

Bias: Neutral

Previous Session Bias: Bearish/Neutral

Resistance:  1507-1512****, 1522-1530***

Support: 1472-1476****, 1459 3/4**

Wheat

Managed Money Position

Updated each Friday with the weekly CoT Report

• As of January 31st, Managed Money were net short 63,628 futures/options.  Broken down that is 56,327 longs VS 119,955 shorts.

Seasonal Trend

• May Chicago wheat futures have trended lower from February 7th through April 7th for 13 of the last 15 years.  The average decline is roughly of 15 cents.  Last year was one of the off-trend years, due to Russia's invasion of Ukraine.  That brought the average gain down.

Technicals (May)

• May heat held its own yesterday in the face of a larger selloff in corn and beans.  For the month of February, May Chicago wheat was down 65 cents. 690-700 will continue to act as technical support.  As mentioned in yesterday's market recap, we think that there may be a risk of a short covering rally.  Though we haven't gotten an updated Commitment of Traders report for nearly a month, we think it's fairly safe to assume that Funds are holding one of their larger net short positions in recent years.  If a Bullish catalyst arises, they may look to buy back those short positions.

Bias: Neutral

Previous Session Bias: Neutral

Resistance:  797-807***, 822 1/4-829***

Pivot: 730-735

Support: 690-700***

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