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May Corn futures trading
Yesterday’s Close: May corn futures finished yesterday’s session down ½ of a cent, trading in a range of 6 cents. Funds were estimated sellers of 7,000 contracts.
Fundamentals: Corn futures retreated again yesterday on chatter of a good South American crop (not new news in our minds). We continue to believe that there will be a growing concern on spring planting in the Midwest that coupled with a large net short position from funds is keeping us optimistic. April option expiration is this Friday that is likely playing some role in the price action.
Technicals: Despite yesterday’s move lower, it was constructive to see prices work off the lows into the afternoon session. The bulls need defend 367 ¾-370 on a closing basis to keep the ball in their court. On the resistance side of things, the bulls want to chew through 375 ½, but the more significant pocket comes in from 380 ¼-383 ½. This pocket represents a key retracement, previously important price points, and the 100 and 200 day moving average.
Resistance: 380 ¼-383 ½****,387 ¾**, 393-395***
Support: 367 ¾-370****, 360-361***, 350**
May Soybean futures trading
Yesterday’s Close: May soybeans finished yesterday’s session down 2 cents, trading in a range of 9 ¼ cents. Funds were estimated sellers of 4,000 contracts.
Fundamentals: Conflicting headlines yesterday afternoon spiked volatility for a brief amount of time. The first headline read: “SOME U.S. OFFICIALS SAID TO SEE CHINA WALKING BACK TRADE OFFERS”. In less than 5 minutes there was another headline that read: “trade talks are in the final stages and that the U.S. trade representative and Treasury secretary will fly to Beijing the week of March 25.”. Though the headlines did move the markets, the reactions have been less and less over the last several months as we live out the real-life version of “The Boy Who Cried Wolf”.
Technicals: The market continues to linger near our support pocket from 900-904 ¼, this is a must hold area for the bulls on a closing basis. A break and close below opens the door for a run at 884 ¾-887 ¾. On the flip-side, we see resistance coming in from 913 ¾-916 ½, this pocket represents a key retracement, along with the 100 and 200 day moving averages. If the bulls can achieve consecutive closes above this pocket, there is room to work higher, towards 930. A failure to find follow through momentum will likely lead to price consolidation.
Resistance: 913 ¾-916 ½***, 924 ¾**, 929 ¼-934 ½***
Support: 900-904 ¼***, 884 ¾-887 ¾**, 870-873 ½***
May Wheat futures trading
Yesterday’s Close: May wheat futures finished yesterday’s session up ¾ of a cent, trading in a range of 8 ¾ cents. Funds were estimated sellers of 2,000 contracts.
Fundamentals: President Trump met with President Bolsonaro of Brazil yesterday. A lot of their discussions revolved around trade, both parties agreeing to take steps in lowering barriers on agricultural products like wheat, pork, and beef. Though we don’t think this is a significant headline, it is certainly a silver lining.
Technicals: Yesterday’s relatively tight ranging trade keeps many of the technical support and resistance levels in play. If the market can continue to defend support levels, it looks like we could see the market work towards 472 ¼-475. This would be a pocket to consider reducing against if you had been a buyer at lower prices last week. We remain friendly the market but are expecting to see heightened volatility.
Resistance: 472 ¼-475****, 497 ½-504 ½****
Support: 447 ¼-450***, 434 ¼-441 ¾**, 425-427**
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