Today’s Spotlight Market
In addition to production estimates, the USDA also reported its estimates for both U.S. and world grain stockpiles. Here the USDA lowered its 2016-17 Corn stockpiles estimate to 2.320 billion bushels from 2.384 billion bushels in September. For Soybeans, the USDA raised their forecast to 395 million bushels, vs. 365 million bushels in September. U.S. Wheat inventories were estimated at 1.138 billion bushels, vs. 1.1 billion bushels in September, but the USDA lowered its global Wheat inventories slightly to 239.7 million metric tons, vs. 240.9 million metric tons last month. ?
Fundamentals
Grain traders went on a wild ride on Wednesday following the release of the October USDA Crop Production and Supply/Demand report. Initially prices rallied in Soybean futures, despite the USDA raising its estimate for this season?s production by 68 million bushels to 4.269 billion bushels. However, the increase was just below average trade estimates of a 4.277 billion bushel crop. For Corn, the USDA lowered its estimate for this year?s production to 15.057 billion bushels, which was 36 million bushels below the September estimate. However, the rally proved to be short lived, as bearish trend following traders took advantage of the post-report rally to initiate new short positions, which capped the day?s gains and ultimately sent both Corn and Soybean prices sharply lower by the close of trading. Ironically, the market had an exact opposite reaction on Thursday, with Corn and Soybean prices sharply higher to close the session. So it appears that volatility has re-emerged in the grain complex as we move through the harvest season.??? ?
Technical Notes? -? View Today’s Chart
Looking at the daily chart for December Chicago Wheat futures, we notice the daily trading ranges have increased rather sharply the past several sessions, and the market appears to be signaling a change in control as a potential major bottom might be forming following what could be argued as an 8-year bear market trend. Prices are currently above the 20-day moving average, but still have a bit of a climb to test the longer-term 200-day moving average which currently sits at the 473.00 price level. The 14-day RSI has turned positive, with a current reading of 56.86. The low of 423.00 made back on August 25 looks to be the next significant resistance level for the December futures, with support seen at the August 31 low of 386.75.?
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