AM Comments 02/17/15
Tuesday, February 17, 2015, 7:02 AM
Submitted by: Dustin Weiner
After taking a 3-day break it was a strong open to the overnight session last night and those gains have carried through until morning as we see corn, soybeans and wheat all trading higher – with wheat leading the charge. The wheat technicals (read: the charts) look friendly as wheat made new highs for the month early on last night and hasn’t looked back. Corn’s chart doesn’t look quite as friendly but if it can take out the recent highs (made Jan 20th and Feb 9th) it too could join the party and start to correct itself with a nice rally.
The soybean chart appears to be hitting a familiar psychological wall: $10 on the March futures contract. That price is turning out to be a tough one to trade through, but SH15 is currently knocking on that $10 door as I type this. I do believe that soybeans have a good chance to break above that level (thanks to some short covering) – but in the big picture if the market is to make a sustained run at new highs… it better hustle. A tidal wave of soybean supplies should be coming to market next month in South America which could make everything feel a little different. It is interesting to note that not many traders believe that soybeans should be at the prices they are at today, so of course not many believe that rallies can be sustained for a long period of time.
One thing to watch for later today is the release of the monthly NOPA soybean crush report. This could either add fuel to the fire or change the direction of the soybean market as we learn how many soybeans were crushed last month in the U.S.
In summary, opening calls are all higher as this market is going through another period of short-chasing. While the corn market feels like it could be preparing itself for a rally in the coming days/weeks, it is difficult to predict how much soybeans can rally due to the factors mentioned above. It will be important/interesting to see how the U.S. farmer reacts to these prices – we have taken both corn and beans up near their highs for the 2015 calendar year!
Corn 2 to 3 cents higher
Soybeans 6 to 9 cents higher
Have a great day!