FOR THURSDAY: (1/5) We managed to get short corn and exit wheat and reverse but our play with beans didn’t work. The trade seemed one day behind in seeing what we saw Monday night with beans but happy they have a chance to go lower. We still want to sell hogs on the technical breakdown on Tuesday, and cattle should hold up on weather for a few more days.
Near term weather forecasts for South America are mixed, too dry in some areas, too wet in others. The South American crop is roughly at the early July stage of development. Early harvest activity in Brazil could start by mid-month, so increased competition for export market share is on the horizon. Soybean meal and oil followed beans higher. Weekly export sales are delayed until Friday.
MARCH CORN (electronic ok)
TODAY’S COMMENTS: (1/5) Resistance up to 363 and 364.50. Usually we can count on corn being lower on Thursdays and the 29/30-day cycles are pretty bearish so let’s see if the key 360 region holds. If not, we doubt 365 will come out.
OVERALL: Three waves down would at least project 340 now if the market stays below 360. Taking out the weekly chart trendline at 351 will be important to allow for something more dramatic to the downside. Old crop could get some help from ideas growers could slash acreage in 2017 by 4.5 million bushels. If the 90 million new crop acres holds, it suggests December 2017 rallies are possible to the $4.40 level, which would be a profitable place to hedge. With corn showing at loss at current prices, we have to wait quite a while until June as usual.
CYCLES OVERVIEW: Generally lower into Jan. 5.
