Grains and oilseeds are mixed on Tuesday following the overnight session. The U.S. dollar continued to push to a two-month low overnight. Crude oil is down sharply and trading at the lowest in about eight months. Stock futures also extended recent losses.
CORN
March corn futures traded moderately lower on Monday after rebounding from their intraday lows. Negative trade continued overnight, likely driven by ongoing weakness in the wheat complex.
Prices are testing the bottom end of their trading range since breaking below their tighter consolidation on Friday. The low end of the current range is around $4.35, which could provide support.
Last week’s break below the 100-day moving average is also negative for the short term.
Crude oil breaking to eight-month lows overnight continues to weigh on the corn market.
SOYBEANS
March soybean futures extended their losses from last week after trading 5.50 cents lower on Monday to $10.81 ½. Friday’s break below the 100-day moving average is negative.
Prices are testing the Oct. 27 breakaway gap between $10.73 and $10.83. Holding above the breakout, even after closing the gap, would be positive for the market.
The USDA’s grain export sales report on Monday showed that soybean sales for the week ending Nov. 20 totaled 2.32 MMT, boosted by strong sales to China of 2.14 MMT. That brought China’s confirmed total to just over 4 MMT or 34 percent of the White House’s 12 MMT target.
China’s SinoGrain sold 63 percent of the 500,000 MT of soybeans auctioned this week. Another 550,000 MT are set for auction later this week. The sales are expected to clear room for U.S. soybean deliveries.
The National Oilseed Processors Association reported that U.S. soybean crush totaled 216 million bushels in November, up 12 percent year-over-year. Cumulative crushings among NOPA members are running 12 percent ahead of last season.
WHEAT
March Chicago wheat futures extended losses this week, losing 8.50 cents on Monday to close at $5.20 ¾. Weakness continued overnight as the market continues to view global supplies as ample, especially from the southern hemisphere.
Volume and open interest have been rising in support of the recent selling. Futures could be setting up for a test of the contract low of $5.08 ½ set on Oct. 14.
While the Commitment of Traders data continues to catch up, it is probably safe to assume that managed money traders have been adding back to their net short position over the past few weeks after prices failed to hold above resistance levels in November.
Aside from strong U.S. exports, there is not much bullish news to help support wheat prices. Globally, Egypt’s wheat imports have been slowing as the country’s new grain buyer prioritizes purchasing efficiencies.
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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.