Rose on Grain – CME Corn and Wheat Finish Holiday Week Higher, Soybeans Lower

November 30, 2021 1:46 pm
Published by

Louis W. Rose IV

Corn:

CME Mar corn futures gained 14¾ cents last week to finish at 591¾.  We did not recommend trading any bias on Thanksgiving week for corn, wheat, or beans.  Mar futures have commenced the week significantly lower.

The corn market finished higher, despite announcement of spread of the Omicron COVID variant and strengthening US currency, on strong US export sales.

Domestically, harvest of the 2021 crop is, effectively, in the books, with trader attentions now turning to 2022 acreage, domestic offtake, and dry conditions across the southern Great Plains.

Net export sales were higher while shipments were lower Vs the previous sales period at approximately 56K and 37M bu, respectively.  Sales were again head of the pace required to meet the USDA’s latest projection while shipments were again well off the pace requirement.  The US is 54% committed and 14% shipped Vs the USDA’s target.  Sales are well ahead the average expected pace for this point of the season; shipments are off their expected pace.

Internationally, there is general optimism regarding production prospects for the new crop across South America.

CFTC Commitments of Traders data for the week Nov 23 (futures only) showed that the trade increased its net short position Vs the previous assay period to approximately 3.08B bu while large specs increased their net long to around 1.8B bu.

For an in-depth analysis of CFTC data see our weekly COT analysis and commentary.

For this week, the weekly technical analysis for and money flow into the Mar contract remain bullish, with the market overbought.  Export data, COVID variant reports, and forerunning of the Dec WASDE report are likely major market moving factors for corn, wheat, and soybean futures this week.

Soybeans:

CME Jan soybeans gave back 10½ cents last week to finish at 1252¾.  As with corn, CME futures have commenced the week significantly lower.

CME soybeans finished modestly lower, despite a continuance of strong US export data, on strengthening US currency, COVID variant concerns, and strong expectations for new crop across South America.

Domestically, as with corn, the 2021 harvest is all but complete, with attentions turning to historic post-harvest rally tendencies and projections of 2022 planted area.

Net export sales were higher while shipments were modestly lower Vs the previous assay period at approximately 57M and 83M bu, respectively.  Sales and shipments were again well ahead of the pace required to meet the USDA’s latest projection.  The US is 65% committed and 34% shipped Vs the USDA’s downwardly revised target.  Sales are notably ahead the average expected pace for this point of the season; shipments are also ahead of the expected pace.

Internationally, growing conditions remain generally favorable, with Conab predicting record production for the new crop.  Overall, expectations are high for aggregate South American new crop production.

CFTC Commitments of Traders data for the week ending Nov 23 (futures only) showed that the trade increased its aggregate net short position to approximately 851M bu; large specs notably increased their net long to around 251M bu.

For this week, the weekly technical analysis for and money flow into the Jan contract remains bearish, with the market no longer oversold.

CME Wheat:

CME SRW Mar futures gained 6 cents last week at 841¼.  CME Mar futures have commenced the new week notably lower.

CME futures finished slightly lower, on strengthening US currency, COVID variant concerns, and the market’s technically overbought condition amid slowing spec participation during the holiday week.

Domestically, dryness across much of the Great Plains is continues to cause concern for 2022 production.  Sowing of the new WW crop is complete, with 92% of the crop emerged.  The new crop is rated in 42% good, or better, condition.

Net export sales were higher while shipments were lower Vs the previous assay period at approximately 21M and 7M bu, respectively.  Sales were ahead of the average weekly pace required to meet the USDA’s official target while shipments again missed the mark.  The US is 61% committed and 40% shipped Vs the USDA target.  Sales are modestly ahead of the average long-term pace for this point of the season while shipments are significantly off their expected pace.  SRW sales were off notably at around 1.3M bu.

Internationally, weather across the Black Sea region (especially Russia) remains generally favorable for winter crop development.  The enhancement of Russia’s export tax seems likely to materialize.

CFTC Commitments of Traders data for the week ending Nov 23 (futures only) showed that the trade increased its aggregate net short position to approximately 475M bu while large specs flipped their net short to a net long of around 101M bu.

For this week, the weekly technical analysis for and money flow into the Mar contract remain bullish, with the market no longer in an overbought condition.  The 800 level remains a point of initial support and movement below this level will likely trigger stop orders.

Have a great week!

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    This post was written by Louis Rose