Grain Express 12/02/22

Posted: Dec. 2, 2022, 8:12 a.m.

Railroad Strike Averted 

Congress gave final approval to a bill blocking a national U.S. railroad strike.  The U.S. Senate voted 80 to 15 on Thursday to impose a tentative contract deal reached in September on a dozen unions representing 115,000 workers, who could have gone on strike on Dec. 9. -Reuters

EPA

President Joe Biden's administration on Thursday unveiled a three-year proposal to expand the U.S. biofuels policy with bigger volume mandates and - for the first time - include a pathway for electric vehicle manufacturers to generate lucrative credits.  Under the plan, announced by the Environmental Protection Agency, oil refiners will be required to add 20.82 billion gallons of biofuels to their fuel in 2023, 21.87 billion gallons in 2024, and 22.68 billion gallons in 2025. 

-Reuters

A Look at the Outside Markets

Equity markets took a nosedive lower following a hotter than expected jobs report.  The initial reaction for the US Dollar was sharply higher.

Corn (March)

Managed Money Position: 156,735 (Updated with the weekly CoT Report)

Seasonal Trend in Play:  March corn futures have trended higher from November 16th to January 4th for 13 of the last 15 years.

Technicals: Corn futures are threatening 4-star support, we've outlined that as 647 1/4-652 3/4.  In our mind, this is a MUST HOLD area.  A failure here could trigger additional long liquidation from the funds.  The next meaningful support pocket that we see, doesn't come in until 638-638 1/2, which represents a small gap from August 23rd.

ZCH2023_2022-12-02_07-46-59

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Soybeans (March)

Managed Money Position: 83,836 (Updated with the weekly CoT Report)

Technicals: March soybeans got taken to the woodshed yesterday, but if you zoom out, we are just back to where we were when we started the week.  We see significant support from 1418 3/4-1425 1/4.  From a risk/reward perspective, we like the long side.  We see some value in the March $14/$15 call spreads.  A break and close below this pocket would likely neutralize our Bullish bias.  

Seasonal Trend in Play:  March soybeans have trended higher from November 16th to January 9th for 14 of the last 15 years.  

ZSH2023_2022-12-02_07-47-27

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Wheat (March)

Managed Money Position: -55,844 (Updated with the weekly CoT Report)

Technicals: Wheat futures are breaking down yet again, threatening the August lows, 760 1/4-761 3/4.  The RSI is at 32, just above what would be considered "over sold".  We've been looking at call spreads as a way to get upside exposure, while limiting the risk.

Seasonal Trend in Play: None

ZWH2023_2022-12-01_07-20-11

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Grains Soybeans Corn Wheat

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