Yesterdays Close: March corn futures closed 3 ¾ cents lower to start the week, trading in a range of 4 ¾ cents on the day.
Fundamentals: Export inspections yesterday came in at 849,226 metric tons, this was just above the top end of expectations from 500,000-800,000 metric tons and up from 683,000 metric tons in the previous week. There was a sale of 102,100 metric tons sold to Mexico. There is nothing new to report in terms of weather or crop development in South America. Fridays USDA report will be the big-ticket item this week as we get final looks at US production. We will continue to compile estimates and hope to have those for you before Friday.
Technicals: If you had sold the 50-day moving average last week near 354, yesterday’s action gave you an opportunity to reduce or clear the slate. Support has held on the first test which comes we have been defining as 345-346 ½. We continue to feel there is an opportunity to be a trader a nickel on either side of 350 as that has been the trend for front month contracts; 350 was a magnet for December futures too. At the bottom end of the range we are changing our bias from neutral/bearish to neutral. If you want to be long this market, this isn’t a terrible spot; you just need to have your risked managed because a close below contract lows opens the door to another 10 cents lower.
Resistance: 354 ¼-355 ¼***, 360-361 ¾***, 375****
Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**
Yesterdays Close: March soybean futures closed 2 ¾ cents lower yesterday, trading in a range of 11 cents on the session.
Fundamentals: Yesterdays export inspections came in at 1,183,089 metric tons, this was within the expected range from 1,000,000-1,300,000 metric tons and was identical to the previous weeks 1,139,436 metric tons. There were sales of 132,000 metric tons to unknown and another 120,000 metric tons to Egypt. South American weather and crop development will continue to be monitored, there is nothing new to report this morning. Fridays USDA report will be what traders and other market participants are really looking forward to, this will give us a final look at US production and hopefully more clarity on market direction.
Technicals: The market has not made it easy for short term futures traders as we have been in a whipsaw trade. Trading in wider ranges intraday, only to finish closer to unchanged over the previous three sessions. We feel the market is in a bit of a “no man’s land” here but like the prospects of higher prices. We aren’t’ the most enthused about futures here but think cheap call options are a viable way to play the market here. If the market were to breakdown closer to 950 ahead of the report, that is the spot to consider futures. On the resistance side, we don’t really have an interest in looking short until we see how resistance holds up from 986-989. This pocket represents the 50% retracement from the June lows to the July highs, as well as the 50 and 100 day moving average.
Resistance: 971 ¾**, 985 ¼-986 ½***, 999-1004**
Support: 950-952 ¼***, 937 ½***, 922 ¼****
Yesterdays Close: March wheat futures finished the first day of the week down 4 cents, trading in a range of 6 ½ cents on the session.
Fundamentals: Export inspections yesterday morning came in at 234,418 metric tons, this was towards the low end of the expected range from 200,000-400,000 metric tons and was also below the previous weeks 274,000 metric tons. Cold and dry weather helped support the market last week, but that premium is slowly working its way out of the market. This is so far fitting in with the 15-year seasonal trade we mentioned at the start of the year. If you had sold wheat on January 3rd and bought back on January 16th, you would have been profitable for 12 of the last 13 years with the average gain being roughly 17 cents.
Technicals: The market failed to get out above the 50-day moving average last week with conviction which kept the bear camp in control. The evaporation of weather premium has prices coming back near first technical support. 416 ½-420 ¾ is the first pocket we are looking at. If you had sold the seasonal/technical resistance, this is the area you want to look at reducing or flattening. A break and close below could open the door to extended pressure towards 410 ½, a retest of the December 12th contract lows.
Resistance: 435-437 ½ ***, 443-448 ¼ ***, 459-461 ¼**
Support: 416 ½-420 ¾**, 410 ½**, 399-402 ¾****
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