Grain commodity futures options research – BrokersEDGE – DAW trading 5-1-18

CORN (July)

Yesterday’s Close: July corn futures finished yesterday’s session up 1 ¾ cents, trading in a range of 5 cents. Funds were estimated to have been buyers of 12,500 contracts.

Fundamentals: Yesterday’s export inspections came in at 1,465,000 metric tons, this was within the range of expectations from 1,000,000-1,800,000 metric tons; last weeks inspections came in at 1,738,000 metric tons. Yesterday afternoon we received the weekly crop progress report, that showed that corn is 17% planted, this was below what some were looking for but still a nice jump from last weeks 5%. Last year at this time we were 32% planted. Corn futures were the beneficiary of a firm wheat trade yesterday, if wheat runs out of gas it may limit near term gains in corn and encourage some producer selling (hedging).

Technicals: The market managed to book its sixth consecutive day of gains, the longest streak since the end of December. July corn futures were technically sound against our 4-star resistance pocket which we have had previously outlined as 400 ½-402 ¾. We are still friendly corn futures but feel a short term pull back would be healthy for the market. Our first support pocket comes in from 396 ¼-396 ½, if we pull back to this pocket, this is where we would look to put exposure back on. If the bulls can achieve a conviction close above resistance, the next stop would be 411-412 ¾. The 100-day moving average is slowly working towards the 200-day moving average, a cross of the 100 over the 200 day is called a golden cross and is looked at as a bullish signal. The RSI (relative strength index) is currently at 63.57.

Bias: Bullish

Resistance: 402 ¾-405 ¼****, 411-412 ¾***, 425 ¾-426 ½**

Support: 396 ¼-396 ½***, 390 ¼**, 379 ½-383 ½****



Yesterday’s Close: July soybean futures finished yesterday’s session down 8 ¼ cents, trading in a range of 20 ½ cents. Funds were estimated to have been sellers of 5,500 contracts for the day.

Fundamentals: Yesterday’s export inspections report came in at 679,000 metric tons, this was above the expected range of 350,000-650,000 metric tons; last weeks inspections number came in at 472,000 metric tons. In yesterday afternoon’s weekly crop progress report, we saw soybeans were 5% planted, this was below the average estimate of 7%; last year at this time we were 9% complete. USDA did announce a sale of 120,000 metric tons to Argentina yesterday which put a bid in the market early on in the session. We will continue to monitor weather in the Midwest over the coming weeks, if delays persist, we could see some corn acres switch to bean (even the thought of it will influence price).

Technicals: The market traded in a wide range yesterday which presented some great opportunities for the day trading crowd. Looking at the intermediate term, the market is still lingering in the middle of “no mans land” with no clear sense of direction. Due to this, we are keeping our bias at neutral. Significant support for the market comes in from 1026 ½-1027 ¾. This pocket represents the 100-day moving average along with the 50% retracement (middle of the range) from the January lows to the March highs. A break and close below would mark lower lows after posting lower highs which would put the bears in near term control. On the resistance side of things, the market needs to stabilize above 1051 ¼ to encourage additional buying to come into the market.

Bias: Neutral

Resistance: 1067 ½**, 1071 ¼-1078***, 1090 ¼***

Pivot: 1051 ¼

Support: 1026 ½-1027 ¾***, 1013-1016***


WHEAT (July)

Yesterday’s Close: July wheat futures finished yesterday’s session up 12 ¾ cents, trading in a range of 12 ½ cents (gap open). Funds were estimated to have been buyers of 5,500 contracts for the day.

Fundamentals: Yesterday morning’s export inspections came in at 376,000 metric tons, this was towards the low end of expectations of 300,000-600,000 metric tons. Last weeks export inspections came in at 644,000 metric tons. Yesterday’s weekly crop progress report showed that winter wheat is rated at 33% good/excellent, this is up from last weeks 31% and also above expectations of 32% G/E. Spring wheat planting is estimated to be 10% complete, this is up from last weeks 3%. The annual wheat quality tour starts today, their findings have the potential to influence price in the near term.

Technicals: Wheat futures marked higher highs yesterday after posting higher lows last week, this is technically constructive and could open the door for short covering to 531 ¾. With that said, we expect to see a choppy trade with wide ranges in the near term. There is a gap on the chart from the Sunday night open, this along with a key retracement will act as first support. That support pocket comes in from 496 ¾-499. This would be a spot of value on the first test. When we say first test, we are referring to the fact that we need to see buying come in quickly at this level. If the market lingers at support, that would be a caution flag for would be buyers.

Bias: Neutral/Bullish

Resistance: 514 ¾-518**, 524 ¼-531 ¾****

Support: 496 ¾-499**, 486-488 ½****, 472 ¾-475 ¼***



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