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On September 30, the USDA will release its Quarterly Grain Stocks report. According to Oliver Sloup of Blue Line Futures, this report has historically been unpredictable, with corn and soybean prices closing higher or lower with equal likelihood, and average trading ranges of 3.55% for corn and 2.83% for soybeans over the past decade. Will this year be different?
Corn
Technicals (December)
December corn futures are retreating back to our pivot pocket this morning, we've outlined that as 408 1/2-409. If you're bullish, you may consider this pocket a good risk/reward setup to the long side. However, a failure to hold here opens the door for a retest of 401-403 3/4. The volatility is low, so utilizing options to hedge futures or as an outright position may be something to consider. The daily average trading range over a 14-day period is down to its lowest level since May, about 6 3/4 cents.
Technical Levels of Importance
- Resistance: 413 1/2-416, 423 3/4-426 1/2*
- Pivot: 408 1/2-409
- Support: 401-403 3/4, 380-385
Export Sales Estimates
This morning's weekly export sales report will be out at 7:30am CT. Estimates range from 550,000-1,400,000 metric tons. Last week was reported at 666,500 MT.
Ethanol
This morning's weekly EIA ethanol report showed ethanol stocks at 23.785 million barrels, above expectations of 23.74. Production was reported at 1.049 million, below expectations of 1.052.
Seasonal Tendency Update
Past performance is not necessarily indicative of future results
Below is a look at this year's price action (black line) VS price averages for December corn over 5, 10, 15, 20, and 30 year periods. Historically the market makes an attempt at a harvest low between now and the first week of October. Keep in mind that we do have a quarterly USDA report on September 30th.
Soybeans
Technicals (November)
November soybeans looked like they were going to attempt a breakout move yesterday, but the early morning strength never really materialized to follow-through buying in yesterday's trade. The lack of conviction from buyers has prices setting back this morning, testing our pivot pocket from 1000-1006 1/2. A break and close below here could trigger another wave of selling pressure. This could be triggered by harvest pressure or more friendly forecasts for Brazil. Seasonally, this is still a tough time of year for beans to stage a meaningful rally (as discussed below).
Technical Levels of Importance
- Resistance: 1023-1024 1/2, 1031 3/4-1035
- Pivot: 1000-1006 1/2
- Support: 984 3/4-991, 973 1/4, 950-955 1/4*
Export Sales Estimates
This morning's weekly export sales report will be out at 7:30am CT. Estimates range from 500,000-1,600,000 metric tons. Last week was reported at 1,474,000 MT.
Seasonal Tendency Update
Past performance is not necessarily indicative of future results
Below is a look at this year's price action (black line) VS price averages for November soybeans over 5, 10, 15, 20, and 30 year periods. Historically the market struggles in the back half of September before attempting to make a harvest low in early October. Weather in Brazil could be the catalyst to make or break that trend as dry weather raises concerns. Keep in mind that we do have a quarterly USDA report on September 30th.
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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.
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