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Fundamentals: Corn futures made new lows for the move to start the week, much of which is attributed to technical and seasonal pressure. Barchart released their estimates yesterday which may have been an added headwind to the market. They have the national corn yield at 183.6 bushels per acre, 9 bushels more than the USDA estimates. This puts production at 15.4 billion bushels. This seems optimistic in our minds, but we applaud them for sticking to their models and not fallowing the herd into the echo chamber. The next USDA report is this Friday, out at 11:00 AM CT. The average analyst estimate for yield is 175.8 bushels per acre. The average analyst estimate for harvested acres is 85.1 million and the average estimate for production is 14.942 billion bushels. For those of you still paying attention to crop progress, Good/Excellent conditions dropped 1% to 59%. 21% of the crop is mature.
Technicals: The market traded into 4-star technical support which we’ve outlined as 507-514 ¼. This is a wider range than we would typically use, but there’s a lot of significance in that pocket. If you’ve been short, this isn’t a bad spot to look at reducing some of that exposure. If you want to be long, this isn’t a bad spot to dip your toes in on the long side. A break and close below here could spark additional long liquidation, so that would be the “tap out” spot.
Bias: Neutral/Bearish Previous Session Bias: Neutral/Bearish
Resistance: 529 ½-533***, 551 ½-555 ½****, 561 ¼-563 ½** Support: 507-514 ¼****, 500 ¼** Soybeans (November)
Fundamentals: Soybeans retreated on the open yesterday which led to additional technical and seasonal pressure. The Barchart estimates that were released midmorning didn’t help the bull camp, they have the soybean yield at 51.3 bushels per acre, 1.3 bushels above the USDA. The next USDA report is this Friday, out at 11:00 AM CT. The average analyst estimate for yield is 50.4 bushels per acre. The average analyst estimate for harvested acres is 86.7 million and the average estimate for production is 4.377 billion bushels. For those of you still paying attention to crop progress, Good/Excellent conditions increased 1% to 57%. 18% of the crop is dropping leaves.
Techncials: Soybeans were higher in yesterday’s early morning trade, testing but ultimately failing against our 3-star resistance pocket from 1300 ½-1306 ¾. In yesterday’s morning report we wrote about that being a pocket to sell against, weather that be going short or reducing long exposure that was put on last week. The market retreated to our support pocket from 1270-1277 ¼, for short term traders, this would be the pocket to reduce short positions, or look at dipping the toes in on the long side if you’re bullish. The risk is well defined here at the bottom end of the range.
Bias: Neutral/Bearish Previous Session Bias: Bearish/Neutral
Resistance: 1300 ½-1306 ¾***, 1325 ¾-1333**** Pivot: 1286 ¼-1292 Support: 1270-1277 ¼**, 1240 ½**** Wheat (December)
Technicals: December Chicago wheat futures were on both sides of unchanged yesterday, finishing the day in negative territory. The bearish head and shoulders formation remains intact so long as the bears can continue to defend 744 ¾-750. With that said, short term traders will have opportunity on both sides of the market.
Bias: Neutral/Bearish Previous Session Bias: Neutral
Resistance: 744 ¾-750****, 770 ½**, 786 ½* 799-801 ½** Pivot: 718 ½-723 ½ Support: 694 ¾-700****
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