AM Comments 10/17/16
Monday, October 17, 2016, 12:10 PM
Submitted by: Dustin Weiner
Our corn and soybean markets are working a bit higher this morning, trading back up close to the highs from Friday (which can be view as short term resistance I suppose). This rally in corn is being mostly attributed to short covering from the funds, as they whittle down their large short positions in both corn (and wheat). Some are saying that the strength in beans could be due to the Chinese delegation that signed contracts in Des Moines Friday - agreeing to buy 5.1 MMT of U.S. soybeans. While it is always nice to see them in town, these are simply purchase agreements and this seemingly annual event shouldn’t surprise many.
The more likely reason for the rally in soybeans comes from oils… Soy oil futures are benefiting from a strong palm oil market overnight (a near limit move higher) which has the soy oil chart breaking out to the upside also. World veg oils are a hot market right now for a number of different reasons (general tight S&Ds on palm oil, and today almost 20% of the Canola crop in Canada is still sitting in the field due to snow and rain) and even though the funds are already near a record long in soy oil – it appears they could keep pushing it higher. Many in Chicago will be watching all of the veg oil charts to look for signs of a top…
Overall for today, we will be watching the money flow as the funds look to lighten up their short positions in corn and also may help keep a bid under the soybean complex (and the rest of the oilseed markets). Weather looks to bring near record warm temps for a large part of the Midwest today with a cold front bringing a little rain with it for parts of the Corn Belt afterwards. The weekly crop progress report will be out this afternoon with the trade expecting bean harvest to come in at 60-65% complete and corn harvest 45-50% complete.
Corn steady to 2 cents higher
Soybeans 6 to 10 cents higher
Have a great day!
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