Summary

The US Presidential election is only a few weeks away, and our nation has become much more versed about the notion of hacking thanks to Julian Assange who caused many individuals to create better passwords for themselves and/or to incorporate ‘two factor authentication’ for their accounts. Regardless of where you land on the political landscape, the importance of internet security is not something one should turn a deaf ear to. On Friday many individuals on the East Coast fell victim to denial of service attacks, including websites such as Twitter, The Verge, Amazon, Spotify and many others. DYN, a domain name service (DNS) company, which routes internets users to the correct websites was the target of the attack. The events from Friday show how vulnerable our infrastructure may in fact be.

The overhead resistance levels that we laid out for Corn, Wheat, Beans, and Crude Oil last week all held up very well. Both Corn and Soybeans realized some increased demand but most of the bullish interest seemed to rest with Soybean futures. According to Friday’s commitment of traders report, the investor net long beans position rose 19,483 contracts to 88,272. That would have us believe that bullish bias may be setting in for Beans. The net long positon size is the largest in two months. End users have clearly been taking advantage of the seasonally low prices, suggesting that Beans may pull out of its sideways congestion to the upside. Investors have also trimmed their bearish stance on Corn by moving to a net short position of 51,986 versus 121,914 from the previous week. The net short Soft Red Winter Wheat position was also on the decline falling 36,378 contracts down to 100,865.

Despite their massive reserves, China has halted auctions for their unused Corn through May 2017 in an effort to push buyers to purchase grain from their current harvest. The USDA has pegged the Chinese Corn stock at 103.7 million tons versus the 200 million tons that is being reported by the China National Grain and Oils Information Center. US Corn inspections hit its lowest level for the marketing year at 875,808 tons, falling below 1 million tons for the first time in almost 4 months. Export sales were strong last week, but this mixed batch of data is consistent with the price movement that we saw Corn last week. Resistance reigned supreme for Corn last week and even out of the chute today price was under pressure – unlike Soybeans that came out of the gate strong. December Corn closed the week down 1.75 (0.49%) and the March contract was down 1.50 (0.41%).

Soybean futures were strong overnight then eased off in early to midday trading. By the end of the day the price returned to strength. Last week the USDA export sales for Beans highlighted great demand. Since the beginning of September, Bean sales are up 26% measured against the same time period last year. Unlike Corn that had down weekly close, the November contract was up 20.50 (2.13%) and the January contract was up 22 (2.27%). The trajectory on the weekly chart is turning to the upside, and today prices hit levels last seen in August. The expiration of November contracts is undoubtedly playing a role in the upside that we are are seeing. Managed Money is closing net short positions but is not re-entering those short positons with forward contracts.

Wheat futures was the weakest of the three markets last week. The December contract was down 6.50 (1.54%) for its weekly close and Beans was not strong enough to pull it higher today. In fact, it lost more ground than Beans gained when the dust settled.