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After three days of fund liquidation in corn, the sell-off seems to have run its course. Early last week, the long corn position held by the trend following funds stood at a record 1.860 BB and reached a record of 715 MB in soybeans. It was just a matter of time before prices broke. In wheat, the trend following funds are adding to their shorts that presently stands at 110 MB. Later this Friday, the supply-demand report will be out, which increases the chance for additional short covering. Traders will go over the report with a fine toothed comb to see how the USDA handles its yield estimate in corn and the 300 MB increase in stocks.
December corn fell to 454.25 in the overnight session and rebounded to 473.75 in the pit trade. Friday’s grain wrap up mentioned that we needed to hold 452 or the chance of trading past 528.75 became slim to nil. Until this happens, it cannot be counted out. The next couple of days should tell the tale. Short-term resistance is spread in three stages between just above where we are now and 5-even.
New crop sales should currently be at the 50 percent level.
November soybeans fell to 1042 today and recovered. Unlike corn, a five-wave pattern is visible in November futures, especially on the weekly chart. This increases the chance that a multi-month or a multi-year high occurred at 1144. If this is the case, the market is subject to a pullback to possibly even below 1000.
Currently, new crop sales should be at the 45 percent mark. The unsold portion of the crop is protected with a long November 940 put.
December wheat fell to 643.25 today and is probably headed to 630 as mentioned in previous comments. Resistance is likely on a rebound to 680. Meanwhile, there is a more bullish pattern showing the potential for a rally into the 8’s, but I am not overly confident of it occurring.
Currently, old crop sales should be at the 70 percent level.
Corn above 6? Soybeans above 12? And wheat breaking through the doldrums and getting out if its trading pattern? Want to know exactly when I expect that to happen and what the chances are. Find out what other producers already know, sign up for a FREE! trial subscription to our daily newsletters.