November 2021 Soybeans: November soybeans closed at $12.63 3/4 Thursday, up 56 1/2 cents from the previous Friday and the highest weekly close in seven years. This appears to be the start of a fifth surge higher since prices first turned higher nine months ago and was prompted by USDA's lower-than-expected planting estimate of 87.6 million acres in 2021. Technically speaking, prices have traded above their 100-day average since mid-August and show no sign of turning lower yet. The weekly stochastic indicator has been in overbought territory since the fall of 2020 but has been unable to confirm a change in trend. Noncommercial net longs peaked at a record high in November and gradual liquidation has taken place since, but the mood is still quite bullish with 84% of noncommercial positions on the long side of the market. Someday, noncommercial bullishness will be a concern, but there is no sign of that yet.
December 2021 Corn: December corn closed at $4.84 1/2 Thursday, up 18 cents from last Friday and the highest weekly close in over six years. Prior to this week's higher close, corn's upward momentum was slowing and the weekly stochastic indicator was hinting at a possible top forming, accompanied by concerns USDA might estimate corn plantings at 93 million acres or more. USDA's lower-than-expected planting estimate of 91.1 million acres on Wednesday changed all that and gave prices another boost toward the $5.00 mark, a likely area for anticipated resistance. As with soybeans, December corn has traded above its 100-day average since mid-August and shows no sign of turning lower yet.
September Minneapolis wheat: September Minneapolis wheat closed at $6.17 3/4 Thursday, down 13 1/4 cents from the previous Friday and 1 cent above its lowest close in 2021. Technically, the weekly close was bearish, finishing below the 100-day average for the first time since August 2020. Spring wheat prices tried to hold sideways for over two months and have some support from dry weather concerns, which are still in play. USDA's planting estimate of 11.7 million acres for other spring wheat was in line with expectations and was not enough to overcome larger, bearish concerns that the world's wheat regions are doing well early in 2021. Technically, last week's lower close is likely to promote more noncommercial liquidation in the near term and keep prices under pressure until more is known about this year's wheat crops.
Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of commodities and futures contracts involves substantial risk and are not suitable for everyone.
Todd Hultman can be reached at Todd.Hultman@dtn.com
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