Charts of the Day – February 20, 2019

Afternoon Market Commentary – February 20, 2019

by: Chris Betz

Corn Soybean Wheat
Old Crop (futures month, change, settle price) CH9 1’0 370’6 SH9 1’6 902’4 WH9 9’0 480’6
New Crop (futures month, change, settle price) CZ9 1’6 398’4 SX9 2’6 948’4 WN9 8’2 488’2

Wheat fell under follow through selling pressure on technical selling. Early pressure also came from the latest wheat tender from Egypt’s GASC. There was no offers of U.S. wheat, with GASC eventually purchasing 360,000 metric tons of wheat split between French, Romanian, Russian, and Ukrainian origin. As catch up export data is released by the USDA, the U.S. export pace has been disappointing. The last five weeks’ worth of data will be released on Friday. U.S. wheat is still priced competitively, however, especially with the recent drop off in futures.

Wheat futures would come back in the afternoon from fresh lows set earlier in the session. Support is around 476 on the continuous chart for the March contract, with significant downside risk to the 450 level should we close below that mark on the week.

Corn found some support by comments by President Trump that China would be “buying a lot more than anyone thought possible.” The extended drop in wheat will have weighed on corn, as well as favorable SOAM forecasts for crops there. March corn held support around 368. Next support is 363, then the contract low at 354’6. Resistance is the 20 day at 377.

Soybeans followed corn to close in the green Wednesday, but trade lacked any real oomph without any new news out of on going negotiations between the U.S. and China. On the March, support is the 100 day at 902’3, but trade has dropped below that mark the previous two sessions, opening up downside risk to 890. Support at the upward trend line from the harvest low on the continuous chart held today.

In outside markets, the USD is slightly weaker again. Energies are mixed, but crude oil and ethanol are firmer. The DJIA is up 67 points at 25,959, and the S&P is up 6 points at 2,786 after the Fed indicated it would end its balance sheet reduction, and expectation to keep rates steady in the near term.

Technical Thoughts – February 14, 2019

By: Ken Lake

Trade talks and untimely USDA reports, specifically export sales, are weighing heavily on values today making it difficult to put any sort of confidence on predicting value.  What follows is simply how the markets look today which is influenced heavily by the underlying bearish fundamental tone in all Ag contracts.

March corn is pointing lower.  Support is 371.  Long term moving averages are pointing lower.  Short term moving averages are tracking sideways at 378.  December corn points to a lower trade with a lot of congestion around 400.  When you look at futures carry into 2020 all contract are trading well over 400 and would offer a good hedge if a producer needs coverage.

March soybeans broke nearly all support today.  Next support is 901.  The contract is a bit oversold.  Soybeans offer no fundamental support because of burdensome supplies.  Producers must be on the defensive if they own old crop soybeans.  The November contract is oversold.  Support is 939.  We must see a significant drop in US seeding this spring to give us any hope values will improve.

Wheat contracts are oversold and poised to test contract lows.  No sale advised.

Opening Calls – December 3, 2018 at 7:12 AM

Beans are up double digits after Saturday’s announcement that the U.S. and China have reached a trade truce, and either side will not levy additional tariffs on the other. More work needs to be done to reach a firm resolution to the trade dispute, but the tone should be much more positive moving forward. Beans were up as much as 29 cents at the open of the overnight session Sunday, and currently up 16 ½ cents. Corn and wheat tagging along with corn up 4 ¼ and wheat up 5 ¼.