Like the results along the Pro Farmer Crop Tour, it was a bit of a mixed bag for the grain markets this week. Opportunistic demand has picked up with flash sales reported nearly every day of this week, and weekly export sales have been encouraging. As long as the dollar remains weak, U.S. grains coming out of the Gulf should be competitive with Brazil The Crop Tour’s findings mostly corroborated the USDA’s projections, but there were a few notable differences. Specifically, the Crop Tour’s projections for 181.1 national average corn yields were 2 BPA lower than USDA’s projected 183.1 national average. The Minnesota corn numbers are likely the biggest contributor to that difference as the USDA expects an average of 185 BPA there, while the Crop Tour data suggested it was around 170 BPA. On the other hand, the Crop Tour painted a rosier picture for soybean yields relative to the USDA by 1.7 BPA.
Open a trading account with Blue Line Futures today!
Click here to start your 10-15 minute online application
Corn:
The slow bleed in corn continued this week, with the December corn contract settling 1 cent lower to 391. Fundamentally, things have been looking up for corn. Mexico purchased 4.3 mil bu in a flash sale on Thursday, and new crop export sales were strong. USDA reported new crop sales at 1,291.2k tons – much higher than average trade estimates, and up 40% from last week’s 920.9k tons. Meanwhile, the technical landscape there is an interesting one. Volatility is virtually non-existent with a 14-period average true range of just 7 ½ cents. While the price slowly trickles lower, RSI has steadily increased since the July 24th lows. The bottom may not be in yet, but the signs of exhaustion are evident. Managed money remains pessimistic on corn, with Friday’s Commitment of Traders report showing a net-short position of 257,896 positions across futures and options. While managed money’s net-short position grew by 8,889 positions from last week, they are well off from their record net-short position of 353,983 positions from July 9th.
Soybeans:
Soybeans managed a higher weekly close for the first time in 3 weeks, settling 15 ¾ cents higher at 973. American soybeans are seemingly back on the menu for global importers, as flash sales were recorded each day of this week. The weakened dollar is making Gulf bids increasingly competitive. Moreover, with rate cuts looming, the DXY may continue to slide. Like corn, USDA reported impressive new-crop export sales this week for soybeans, totaling 1,676.9k tons – up nearly 25% from last week’s 1,344.2k tons. On the technical side, Wednesday’s failure to break and settlement above 985 ½ was deflating, and contributed to Thursday’s sell-off. However, forecasts calling for extreme heat may be able to add some steam for bulls headed into next week. The 20-day moving average has been a major sticking point for soybeans this year, and a clean break above 985 ½ sets up for a test of the moving average around 996, and ultimately the 1000 handle. Managed money is reportedly holding a net-short position of 182,768 across futures and options. That’s an increase of 8,321 positions from last week’s 174,447 position net-short, and they are now within 3,000 contracts of their record net short position of 185,750 established in early July.
Chicago Wheat
December Wheat was the biggest loser this week, shedding 26 ½ cents to settle at 528. The market is seemingly discounting supply-side concern narratives out of France and Eastern Europe, because the sell-off appears to be accelerating, despite sitting at 4-year lows. Moreover, managed money significantly trimmed their net-short position this week, which is now just 52,985 positions – 20,303 fewer positions than last week.
Open a trading account with Blue Line Futures today!
Click here to start your 10-15 minute online application
Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.
With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500
Performance Disclaimer
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.
On the date of publication, Oliver Sloup did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Disclosure Policy here.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
