Posted on November, 7, 2024 at 08:42 pm
DTN Reports:
Markets in general came out of the gates Wednesday with a very explosive tone following former President Trump’s reclamation of the Oval Office in Tuesday’s election. Outside markets were mixed with a very strong U.S. dollar providing pressure to commodities. But stock market indices skyrocketed with the DJIA reclaiming all of its losses from October’s selloff in just a few hours to set a new all-time high. Grains were more of a mixed bag with corn maintaining its solid pace higher, while soybeans rebounded from 19 3/4 cent losses in the overnight trade to close slightly higher. Wheat futures remain mixed and rangebound.
WHEAT:
Wheat futures logged a fairly uneventful day Wednesday. Like corn and soybeans, futures shrugged off early weakness to close just slightly lower. Wheat futures remain in a tight, rangebound trade, as production concerns on the home front as well as abroad appear enough to support U.S. futures. Dow Jones on Wednesday morning reported increasing unease from agency SovEcon regarding Russian wheat stocks following strong export pace through the first months of this marketing year and raised concerns as to the country’s exporting capabilities moving forward. Remember, the Russian government implemented a price floor on wheat exports in mid-October in an attempt to hold domestic supplies. U.S. forecasts remain bearish with much of the winter wheat growing areas east to west slated to get more rain coverage this week and next. The 2- to 5-day forecast shows increased chances in the far west hard red areas too, which was an area that missed out on some of last week’s event. In technicals, December Kansas City wheat futures are facing a situation much the opposite to that of corn, with a consolidation of the moving averages above the market at $5.82-$5.83 likely to stand as resistance to a move higher. Support is still in the low to mid $5.60s.
CORN:
Corn futures shook off early weakness to post a very solid day higher — the fourth up day in a row for December futures. Futures traded back to early October highs Wednesday and have solidified their move above the 100-day moving average. The market was fairly quick to move past the election results, as tariff fears will not hugely impact corn business to China, which has slipped back to pre-pandemic levels. The Energy Information Administration released their weekly ethanol production report Wednesday morning, pegging production for the week ended Nov. 1 at 1.105 million barrels per day. This was a new marketing year high for production and the highest level since late July’s record 1.109 million barrels per day. Quick figuring puts corn used for ethanol at roughly 115 million bushels (mb) and brings the business for the year on pace to grind 5.497 billion bushels (bb) of corn in 2024-25. This would be the second highest corn crush figure ever. We are obviously still very early but this grind pace, combined with strong ethanol exports and strong domestic margins for plants, bodes well for the industry’s performance moving forward. Looking at the December corn chart, prices rejected a throwback attempt to the 100-day moving average, now at $4.13, and reversed strongly higher to levels not seen in a month. The pre-harvest rally high of $4.34 1/4 is now a clear price objective for bulls in the near term. Meanwhile, to the downside, the major moving averages have all converged on the $4.13 price point, which should serve as support for prices but also may have some magnetic qualities to it as well. Following Wednesday’s surge higher, I would not be all that surprised to see prices retest this level through the week ahead of the USDA numbers on Friday.
Source: Northern AG