Will the sell-off in grains hold?
Grains have been on a pullback since the last WASDE and we have another one coming up in a couple of weeks when stocks and demand will all be forefront in how much more prices could hold and go higher. The weekly CoT report from the CFTC showed net new buying and short covering from the soybean spec traders during the past week. That throws the the net longs for the November expiration by about 25k contracts to 120,739. Commercial hedgers added 42k new shorts amounting to about 10-12% of the overall open interest through the week taking their net short positions to 187,370 contracts.
Support now sits in a 50-odd point price band between 1295~1346 and falling to the lower edge of this support cannot be ruled out given the situation with supply and true demand. Last week, export numbers were encouraging causing some stir in prices as we squeezed higher. The downside here has more potential owing to the imbalance in longs-vs-shorts. Keep and eye on the support band and trade cautiously.
Short-term, resistance is at 1380.25 and the initial profit target for the short trade is 1340.
Support now sits in a 50-odd point price band between 1295~1346 and falling to the lower edge of this support cannot be ruled out given the situation with supply and true demand. Last week, export numbers were encouraging causing some stir in prices as we squeezed higher. The downside here has more potential owing to the imbalance in longs-vs-shorts. Keep and eye on the support band and trade cautiously.
Short-term, resistance is at 1380.25 and the initial profit target for the short trade is 1340.
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