CORN (March)
Last Weeks Close: March corn futures finished last week up 3 ¾ cents, trading in a range of 8 ½ cents. This is the second consecutive week of gains; we have not seen three consecutive weeks since May. Friday’s Commitment of Traders report showed funds bought back 8,006 contracts, putting their net short at 217,057. Keep in mind that this data is through Tuesday and does not include the back half of the week.
Fundamentals: Grains opened the Sunday night session on firm footing which has carried over into strength in the early morning trade. Grain markets seem to be working together here as funds are looking to reduce some of their short positions as we round out the first month of 2018. South American weather continues to be the headliner as concerns continue to linger with regards to hot and dry temperatures, this could lead to eventual yield loss.
Technicals: The market has managed to crawl back towards the December 4th highs, the bulls will want to see consecutive closes above this resistance pocket to encourage additional short covering. The next level of resistance comes in at 366 ½. We will be waiting to see how the floor open goes as volume confirms price. First technical support this week comes in from 352-354 ½. The RSI is currently at 65.5, the most overbought since peaking in July.
Bias: Neutral/Bearish
Resistance: 358-360 ½ **, 366 ½-369****
Support: 352-354 ½***, 345-346 ½***, 334-335 ¼****
SOYBEANS (March)
Last Weeks Close: March soybean futures finished last week up 11 cents, trading in a range of 22 ½ cents. According to Friday afternoons Commitment of Traders report, funds were buyers of 24,487 contracts putting their current net short futures position at 81,218.
Fundamentals: The market started the Sunday night session with a gap higher as concerns n South America persist. If we continue to see hot and dry weather patterns in Argentina, it is possible we see yield and production loss discussions gain traction. If we see rains work back into the forecast, we will see this weather premium evaporate from the market rather quickly. Seasonally speaking, we are in a bullish time. If you had bought May soybeans on January 28th and sold February 26th for the last 15 years, you would have been profitable for 13 of them with the average gain being roughly 28 cents. We will continue to keep our eyes on the soybean meal market has it continues to offer support.
Technicals: Soybean futures traded well technical last week. Technical resistance was tested and defended by the bears, that came in from 999-1006. On the support side, we saw the market retreat back towards our pocket from 983-988. This represents the 50 and 100 day moving average, along with the 50% retracement (middle of the range) from the June lows to July highs. The bulls still remain in control of this market until we see a conviction close below technical support.
Bias: Neutral/Bullish
Resistance: 999-1006***, 1020 ¼-1027****
Support: 983-988***, 971 ¾**, 961 ¼-963 ¼****
WHEAT (March)
Last Weeks Close: March wheat futures finished last week up 19 cents, trading in a range of 22 ¾ cents. This was the biggest weekly gain we have seen since June. Friday’s Commitment of Traders report showed funds sold 808 futures, putting their net short futures position at 149,777. Keep in mind that this data is compiled through Tuesdays trade.
Fundamentals: Concerns over winter wheat stress has led to some short covering from the funds, this will continue to be monitored closely over the coming weeks. Last week we saw a lot of volatility into the currencies which spilled over into a lot of the commodity markets. If we see the USD rebound and recover losses, we could see that stall out the rally. Also, on our radar will be the weekly export numbers. The bulls need to see a trend of better exports to help this short covering rally turn into a bullish market.
Technicals: The market made a nice run higher last week on the back of technical short covering. Our resistance pocket continues to come in from 443-448 ¼, this is being tested in the early morning session which will make today’s closing price more significant. The bulls want to see price confirmed by increased volume on the floor open. A break and close above resistance opens the door to 456 ¼. A failure and close back below 443 lends hand to a run back at 428 ¾.
Bias: Neutral
Resistance: 443-448 ¼****, 456 ¼***, 472 ¾***
Support: 428 ¾***, 410 ½-413 ¼****
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