Soybeans look to be the leader moving forward in the grain sector in my view. Ending stocks came in at 120 million bushels vs trade expectations of 123.Corn ending stocks were lowered just 50 million bushels to 1.502. That was a report day surprise in my view but I think there are whispers within the trade that have old crop ending stocks that eventually move down to 1.2 billion from the current 1.5. That said, China along with “Unknown Destinations” has approximately 700 million bushels left unshipped. In my view it’s doubtful they get all of that sizable tonnage shipped in the old crop marketing year. That opens the possibility of a potential move in old crop/new crop corn spreads should China cancel old crop cargoes and switch to new crop delivery or just cancel outright. However with bean ending stocks at over 7 year lows, if beans make a push to let’s say 15.00, I don’t see corn trading sideways here. The question moving forward is will soybean harvests in Brazil then Argentina pressure the market enough in the coming weeks to offset the low ending stocks here in the USA. We have an inflationary back drop in the market to support with the new administration looking to print another $2 trillion. There are certain forecasters predicting more hot and dry for Argentina in the second half of February while Northern and Central Brazil are too wet, potentially delaying bean harvest and preventing second crop corn from getting planted.
In my view technical’ s come in as follows for March 21 corn for the remainder of the week. Support is at 551.4. A close under in my view and it s5.39. A close under 5.39 and its 528/532. A close under and it’s 515 and 5.08. Near term resistance is 556 which is 15 percent higher for year. Trendline resistance is 565, which is where we went out yesterday. Over 565, its 579.4/580.
For Soybeans, resistance is at 14.08. A close over 14.08, and its 14.36/14.42. Ten percent higher on the year in beans is 1442. Over 1442, and I think the market pushes to 15.07, the 15% threshold form the year. Support is down at 1376 and then 1369. Under 1369, and its katy bar the door to 13.11, unchanged on the year.
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