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Grain markets showed mixed performance to start the week. Wheat saw significant losses, reversing gains from the previous session. Corn and soybeans traded in narrow ranges but ended the day slightly lower amid pressure from harvest activity and weak demand.

Prices as of September 16^th, 2024 – 20:00CDT

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The information provided in this newsletter is for informational purposes only and should not be considered financial advice. We recommend consulting with a commodities broker and financial advisor before making any commodities decisions.

This analysis presents a composite analysis that we have developed to evaluate technical indicators. We have back tested this model with thousands of scenarios. The back testing has proven the model to be accurate 65.6% of the time. This is significantly better than other technical analysis techniques. This is a weekly analysis that analyzes if there are any changes in trends.

The bearish trend is currently strong for CORN. As long as the price remains below the resistance at 435.67 USD, you could try to take advantage of the bearish rally. The first bearish objective is located at 387.67 USD. The bearish momentum would be revived by a break in this support. Sellers would then use the next support located at 367.21 USD as an objective. Be careful, given the powerful bearish rally underway, excesses could lead to a short-term rebound. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating reversal of the trend.

The force of this analysis is 6.4, which is strong but not at level 8 or above. Wheat has been on a downward trend, but that trend seems to be leveling off. This aligns with out AI fundamental models that suggest that wheat are going to be volatile but will level off and gradually increase. Keep an eye on the $387.67 and $435.67resistance levels. Hopefully, we will push the $435.67 level, which could send corn on a bullish run.

As we delve into the latest market dynamics, it's clear that the current harvest pressure continues to significantly drive grain prices. Corn, soybeans, and wheat all experienced varying degrees of downward pressure, with wheat notably taking the biggest hit. Despite some short-term fluctuations, our analysis and technical models suggest a sustained rally is likely once the harvest season is complete.

Corn futures experienced a slight decline as early harvest activities exerted pressure on prices. The USDA’s upcoming crop progress report is expected to shed light on the pace of the harvest, with warm and dry weather likely accelerating crop maturity and movement into the market. The surge in supply may cap short-term gains, making it difficult for prices to rally substantially. Last week, export inspections for corn were notably lower than anticipated, which reflects logistical challenges on the Mississippi River and a shift in focus to soybean shipments. Despite managed funds reducing their short positions, they continue to hold a significant net short position, indicating the potential for price movement if market conditions shift unexpectedly. Our weekly technical analysis reinforces a bearish sentiment for corn, with prices currently struggling below crucial resistance levels. The market may remain under pressure unless there is an unforeseen drop in supply or an uptick in demand, which could prompt a covering of prominent short positions.

Soybean prices faced minor declines, influenced primarily by lower-than-expected NOPA crush numbers. The National Oilseed Processors Association (NOPA) report showed August soybean crush totals falling to nearly a three-year low, while soybean oil stocks hit a 10-month low. These figures came in significantly below market expectations, reflecting weakened processing activity. However, export inspections were slightly up from the previous week, and a recent 132,000-metric-ton export sale, presumably destined for China, provided some support. Managed funds have reduced their short positions in soybeans but remain significantly net short, suggesting a continued cautious stance in the market. Soybean meal and oil prices managed to close higher despite the downward trend in soybean futures, indicating a possible decoupling of the product market from the overall soybean market. Favorable weather in South America has contributed to the bearish outlook, with expectations of ample supplies from upcoming harvests.

Wheat markets endured double-digit losses across all classes due to profit-taking and technical factors. The easing of tensions in the Black Sea region may have also helped alleviate some global supply concerns, contributing to the downward price movement. Nevertheless, weekly wheat export inspections reached 20.5 million bushels, pushing total inspections for the 2024/25 marketing year 34% ahead of last year’s pace. The USDA's recent estimates for wheat exports remain unchanged at 825 million bushels, representing a 17% increase from the previous year. The wheat market also saw funds buying back 13,000 contracts, reducing their net short position to its smallest in three months. Despite these developments, dry conditions in Argentina persist, keeping global supply projections tight. The wheat market's future strength will depend on continued export demand and potential disruptions in global production, mainly if weather-related issues arise in major wheat-producing regions.

Market volatility continues to be a significant challenge, making it difficult to identify clear trading opportunities. Our artificial intelligence (AI) models have proven accurate in predicting high volatility, projecting gradual price climbs in corn, soybeans, and wheat. Our weekly technical analysis reveals a robust bearish corn trend, with prices well below crucial resistance levels. However, the trend is leveling off, aligning with our AI models' forecast of stabilization followed by a slow upward movement.

The current market environment suggests that a cautious approach is warranted. Short-term price movements remain highly sensitive to harvest progress, export demand, and weather conditions. Traders should closely watch the USDA’s crop progress reports, as they will provide critical insights into harvest completion rates, influencing market sentiment and price directions. A sustained rally in corn, soybeans, or wheat prices seems unlikely until the harvest is entirely underway and the market has digested supply data. Nonetheless, unexpected shifts in supply or demand could prompt a change in market dynamics, particularly if managed funds start covering their significant short positions.