Commodity futures breaking news now – DAW Trading BrokersEDGE 4-5-18
Yesterday’s Close: May corn futures finished the day down 7 ½ cents, trading in a range of 17 cents. Funds were estimated sellers of 30,000 contracts on the session.
Fundamentals: Tariff talk dominated the ag industry yesterday morning as early morning headlines led some market participants to sell first and ask questions later. At the end of the day, China is not a huge buyer of US corn, less than 1% of our exports go to China. A lot of the pressure was likely spill over from beans which is a whole different story (see soybean section). Yesterday’s weekly EIA ethanol report showed ethanol production at 1.038 million barrels per day, this was a hair lower from last week but still up nearly 2% from the previous year. We are expecting the volatility to linger as we approach the weekend. Volatility often times invites more volatility as market participants try to keep their books in balance. We will start keeping a closer eye on weather here in the states as we producers start to ramp things up for planting. We do have a USDA report next week, we hope to have estimates for you over the weekend. Export sales this morning came in at 898,0000 metric tons, this compares to the expected range of 1,000,000-1,300,000 metric tons; last week’s read came in at 1,353,000 metric tons.
Technicals: The market blew through the 50 and 200 day moving average early yesterday morning and tested our support pocket from 368 ¾-371 ¾. The market worked the way it should, and we saw price discovery happen before our eyes when the floor opened, and we got more volume. We ended up stabilizing above the 50 and 200 day moving average which is encouraging for the bulls. That dip in everything from corn to cattle was an excellent opportunity to buy; as the old saying goes “buy when people are fearful and sell when people are greedy”. The bulls want to see a close back above 382 ¾-385 today to encourage prices to work back towards the $4 handle. If the market cannot get traction here, we could see some long liquidation from the funds press us back towards 377-377 ¾.
Resistance: 382 ¾-385**, 393 ¾-395 ¼***, 400 ¾**
Support: 377-377 ¾**, 368 ¾-371 ¾****, 364 ¼-365 ¼***
Yesterday’s Close: May soybeans finished the day down 21 ¾ cents, trading in a range of 58 ¼ cents. Funds were estimated sellers of 21,000 contracts for the session.
Fundamentals: Soybean futures finished well off of the lows yesterday as market participants digested the news that China had released a list of retaliatory tariffs, a list of 106 products that included soybeans. We mentioned last week that we would not be surprised to see China jawbone prices lower to step in and be buyers. Yesterday morning the USDA announced a sale of 129,000 tons of soybeans sold to China, and another 325,000 to unknown (unknown is usually another way to say China). We have been taking a lot of the tariff talk with a grain of salt because we have questions with regards to whether China can afford to not buy our beans going out past six months. Bean prices in South America caught a bid yesterday which in turn helped support our prices. Outside of the US and South America the options for China seem somewhat limited. As with corn, we will start to turn attention towards weather in the states, some less than ideal conditions could start to move some acres to soybeans. This morning’s export sales came in at 1,133,000 metric tons, this compares to the expectations of 600,000-900,000 metric tons; last week’s read came in at 318,000 metric tons.
Technicals: Soybean futures ripped through all the major moving averages and two key Fibonacci retracement levels yesterday before stabilizing into the afternoon to finish the day right near where we opened last Thursday. We have been bearish on the market for other reasons than China tariff talk and used yesterday morning’s move lower to work with clients in reducing short exposure; especially in the options where premiums were juiced. We will likely sit on our hands here before looking to put some of those positions back on. First resistance today comes in at 1029 but the more significant pocket comes in from 1034 ¼-1035 ¾. A close above this pocket could get us back towards 1050-1052 ¾.
Resistance: 1029**, 1034 ¼-1035 ¾***, 1050-1052 ¾****
Support: 1011 ¼***, 1002 ¼-1004 ¼***, 979 ¼-981***
Yesterday’s Close: May wheat futures finished the session down ¾ of a cent, trading in a range of 14 ½ cents. Funds were estimated sellers of 5,000 contracts on the day.
Fundamentals: Wheat futures held up extremely well in the face of the blood bath in corn and beans yesterday morning. If corn and beans can stabilize it will give wheat a green light to work higher. Colder temperatures helped provide that support as concerns linger over the winter wheat crops potential; we will l continue to keep a close eye on KC as it will likely be the leader. Export sales this morning came in at 109,000 metric tons this compares to the expected range from 200,000-500,000 metric tons; last week’s came in at 354,000 metric tons.
Technicals: Looking at the chart you would have thought it was just another day in the grain markets. May Chicago wheat continued to hug the 100-day moving average and trade within the recent range. Tuesdays and Wednesdays price actions were incredibly constructive for prices in our mind and do have us changing our bias from neutral to neutral/bullish. There is some headwind from 467-469 ½, a break above that will likely start to encourage short covering from the funds. This pocket represents a key Fibonacci retracement, the 50-day moving average, and the gap from March 16th.
Resistance: 467-469 ½****, 478 ¾***, 494-495**
Support: 450-450 ½**, 440**, 423 ¾-426 ¾****
|E-mini S&P (June)|
Yesterday’s close: Settled at 2647, up 33.75
Fundamentals: What a turnaround yesterday! We have hammered home the exacerbated feel of this sell-off all week with the blatant negativity being a true upside catalyst. The S&P is now 100 points from yesterday’s session low and traders did not need to pick a bottom, there were many opportunities to get long as the day unfolded. The pendulum of sentiment clearly began to swing back when the S&P regained the 200-day moving average about an hour after the cash open. White House officials Wilbur Ross and Larry Kudlow both brought a breath of fresh air to headlines that would have otherwise told you the world was falling apart. While we might sound like a broken record, it is extremely important to understand that this market is not coming out of a long period of low volatility that blows out adverse positions and cascades selling; this already happened two months ago. Furthermore, that if the S&P gets out above the previous sessions high and resistance at 2615.75-2618.50, we could see another 20-30 points on the day. This is exactly what happened upon such breakout. So, what now? What began to look like a poor daily chart on Monday has created an appealing bullish bottom through the week from both the technical side and sentiment side; we began referring to yesterday as a capitulation of sentiment. It is important to understand that volatility is not going anywhere, and neither are the negative headlines, this is the new norm. Tomorrow’s calendar brings tremendous headwind and if you did not buy yesterday, there is no need to chase ahead of Nonfarm Payroll and furthermore, Fed Chair Powell’s speech; opportunities will present themselves. Today we look to weekly Jobless Claims and Trade Balance data at 7:30 am CT. Atlanta Fed President Bostic speaks at noon CT.
Technicals: We have never wavered from what we called a long-term bullish outlook as long as the S&P remained above its 200-day smoothed moving average and the NQ remained above its 200-day moving average. However, we have and will exude caution when the S&P trades below its 200-day moving average. Yesterday’s technical move out above resistance at the 2615.75-2618.50 level was extremely strong and even exceeded or expectations of trend line and major three-star resistance at 2635-2643. It will now be absolutely critical for the market to maintain price action and a close above 2647-2649.50 in order to hold this immediate term bullish momentum. All eyes are now on the 2679.75 level which now not only comes in play as last week’s high but also aligns with another key technical indicator; a close above here will garner further buying. Traders also want to watch for the NQ to close out above major three-star resistance at 6650-6670 in order for this immediate-term momentum to hold true.
Resistance: 2667*, 2679.75****, 2698**, 2709.75***
Support: 2647-2649.50***, 2626**, 2613.25-2618.75**, 2600.50**, 2592.25***
Crude Oil (May)
Yesterday’s close: Settled at 63.37, down 0.14
Fundamentals: Crude was a casualty to the risk-off trade early yesterday, trading to a low of 62.06. Price action has recovered well but nothing to write home about. The Technicals on yesterday’s session are very favorable (discussed below), but still, the lack of follow through this morning is a little concerning when you consider both the rebound in equity markets and at minimum a slightly bullish EIA inventory report. The report showed a bullish headline draw 4.617 mb when a build of 1.4 mb was expected. However, the closely watched Cushing added 3.666 mb. This has likely worked to hold back gains despite it being less than 50% full. Production was added in the tune of 27,000 bpd but we continue to believe this steady climb in production is priced in. The risk is to the upside up simply no increase in production. Traders must keep a close eye on the U.S Dollar today but more so ahead of a crucial day tomorrow with Nonfarm Payroll and Fed Chair Powell.
Technicals: We reintroduced our Bullish Bias yesterday morning when price action was testing major three-star support at 61.70-62.07. The low was 62.06 before a surge to an overnight high of 63.79; Unfortunately, major three-star resistance now comes in at 63.86-64.23 and this is holding price action back. Yes, we believe Crude Oil will finish the week out above here but it is surely making us bulls uncomfortable this morning. The pivot at 63.13-63.23 is well, pivotal, the long price action stays above here the more upbeat we become on the immediacy of the next leg higher.
Resistance: 63.86-64.23***, 65.47**, 66.02**, 66.66-66.87***, 70.00***
Support: 61.70-62.07***, 59.91-60.00***
Yesterday’s close: Settled at 1340.2, up 2.9
Fundamentals: Gold has taken it on the chin into this morning as equity markets rebounded from the so-called abyss. We remain unequivocally long-term bullish gold for many reasons and equity market volatility/weakness has not been very high on this list. Former Fed Chair Yellen spoke at a private dinner last night and commented that she expects three and maybe four hikes this year. This added to early pressure in Gold. Weekly Jobless Claims came in at the highest since January 11th and this coupled with a larger Trade Deficit than expected should help solidify some footing on the session in Gold. Atlanta Fed President Bostic speaks at noon CT. Tomorrow is Nonfarm Payroll and Fed Chair Powell speaks
Technicals: This is undoubtedly disappointing price action in the very near term; the ping pong continues. Gold is hugging the 1331.8 pivot and the longer it does the more positive. Previous swing lows now bring first key support and price action must hold this to remain constructive in the immediate term. Regardless, our long-term bullish belief is unwavering, and we see tremendous long-term support below here.
Resistance: 1339.6-1340.2**, 1353.8**, 1360**, 1367.8-1370***, 1375.5**, 1392.6**, 1427.2***
Support: 1325.4**, 1312.4-1316.6***, 1304.6***
Natural Gas (May)
Yesterday’s close: Settled at 2.718, up 0.021
Fundamentals: Natural Gas continues its consolidation with no clear direction. Storage data is due at 9:30 am CT and expectations range from -23 bcf to -29 bcf. The focus is shifting away from storage draws and will soon be on building. Weather does remain a risk to the upside as cold temperatures persist for now.
Technicals: Price action is playing back and forth around the pivot and yesterday’s bounce that ran into Monday’s drop has dissipated. Strong support remains at the 2.60 level and the tape has built a higher low for three straight sessions now. We remain Neutral and see now clear edge to either side.
Support: 2.60**, 2.486-2.532****
Yesterday’s close: Settled at 120’265, down 0’005
Fundamentals: Yesterday we pointed to the lack of bid on the U.S and China trade war news as more consolidation ahead. This coupled with the strong rebound in equity markets has essentially removed the bid entirely and the 10-year has grinded lower ahead of tomorrow’s jobs data. Former Fed Chair Yellen spoke at a private event last night and pointed to three and potentially four hikes this year. This has aided the bear camp headed into this morning. Weekly Jobless Claims were at the lowest level since January 11th and the Trade Deficit came in larger than expected, still this has not reinvigorated much buying. Unless equity markets lose footing ahead of tomorrow, the trade will remain soft.
Technicals: Price action is now firmly below our line in the sand to hold a Bullish Bias. The bears now have a technical edge ahead of tomorrow’s big fundamental day. Support comes in at 120’15 and it is likely that this level will hold if tested today. We are now completely Neutral.
Resistance: 121’19***, 122’02*, 122’14-122’25****
Support: 120’15**, 120’09**, 120’045 119’305**, 119’265**, 119’00-119’14****
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