Opinion

Grain Markest Slide Lower Ahead of the USDA Report

Short dated options and new crop weekly options can be a great tool to manage risk or take a position ahead of tomorrow's report. The shortened time frame can offer a more cost-effective way to manage risk. Feel free to reach out to our trade desk to discuss potential strategies.
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Corn

Technicals (May)
Yesterday's continued failure against the 50-day moving (red line) average and break back below the 20-day moving average (blue line) has led to a decline in prices ahead of tomorrow's report, taking us back to the breakout point from 3-weeks ago. A failure to defend 431-435 on a closing basis puts the Bears back in the driver's seat with the next support pocket coming in about a dime lower, 421-422.

Bias: Neutral

Resistance: 441 3/4-444 1/2, 447 1/2-450*

Pivot: 431 1/2-435

Support: 421-422***

Fundamental Notes

The range of intended corn acres comes in from 90.0-93.472 million acres, with the average estimate being near 91.8 million acres.
Quarterly stocks estimates range from 8.129-8.568 billion bushels with the average estimate being 8.427. This would be 14% higher year over year and a 5-year high for this time of year.
Markets will be closed on Friday in observance of Good Friday.

Fund Positioning

Friday’s Commitment of Traders report showed that Funds were net buyers of roughly 13k futures/options contracts, the bulk of that being short covering. That trims their net short position to 242,988 contracts. Broken down that is 171,123 longs VS 414,111 shorts.

Seasonal Trends

(Past performance is not necessarily indicative of future results)

Below is a look at price averages for December corn, using the 5, 10, 15, 20, and 30 year averages. Though we believe we can see prices firm from these levels, we would urge Producers to temper the expectations, given the current balance sheet.

Continue Reading the full article at: https://bluelinefutures.com/2024/03/27/grain-markest-slide-lower-ahead-of-the-usda-report/

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