CORN (May)
Yesterday’s Close: May corn finished the day up 2 ½ cents, trading in a range of 3 ½ cents on the day. Funds were estimated buyers of 6,500 contracts.
Fundamentals: Export inspections yesterday morning came in at 947,642 metric tons, this was below the expected range from 1,100,000-1,400,000 metric tons; last week’s came in at 1,305,853 metric tons. Argentina continues to be the headline story as dry weather could pose a risk to production. Brazil’s safrinha corn planting is estimated to be 63% complete, this lags last year’s pace which was 75% for the same time. Market participants will start turning attention towards Thursdays WASDE report where we will get some new news that doesn’t revolve around weather.
Technicals: The market is firm to start the week after holding technical support on Fridays session. That pocket continues to come in from 379-382 ¾. This pocket represents a key Fibonacci retracement as well as the 200-day moving average, both of which represented previous resistance. On the resistance side of things, we do not see a whole lot in the way until 391 ¾-392 ¾. This represents the 50% retracement (middle of the range) from the July highs to the January lows. The market is “overbought” but that is not a good enough reason to look short. The chart remains friendly until a close back below support.
Bias: Neutral/Bullish
Resistance: 391 ¾-392 ¾**, 400 ¾-406***
Support: 379-382 ¾****, 376-376 ½**, 370 ¼-372 ¼***
SOYBEANS (May)
Yesterday’s Close: May soybean futures closed 6 ¾ cents higher, trading in a range of 12 ¾ cents on the day. Funds were estimated buyers of 6,000 contracts.
Fundamentals: Export inspections yesterday morning came in at 990,113 metric tons, this was towards the top end of the expected range from 600,000-1,000,000 metric tons; last week’s came in at 761,961 metric tons. We are aware of the broken record, but it is what it is, weather continues to be the headline factor. Thankfully we do have a WASDE report on Thursday, it will be nice to get actual new news on the wires; we will have estimates out tomorrow morning.
Technicals: Soybeans were choppy yesterday but managed to close towards the high end of the day’s range. The inability to see a clear-cut rejection from the 1082 ½ highs at the end of the week should be viewed as a caution flag for the bears. The market is in “overbought” territory but that is not enough of a reason to short. If you’ve ever traded beans or wheat before, you know that the RSI can stay elevated for an extended period of time. A break above technical resistance opens the door for another leg higher towards 1091 ½, this would be a great opportunity for the bears on the first test. On the support side of things, there is not a lot until 1059-1065. A break and close below this support pocket could spark a round of long liquidation.
Bias: Neutral
Resistance: 1080-1082 ½****, 1091 ½**, 1119 ½-1123****
Support: 1059-1065***, 1039-1040****, 1013 ¾-1016**, 1001-1006***
WHEAT (May)
Yesterday’s Close: May wheat futures finished up 8 cents, trading in a range of 15 cents on the day. Funds were estimated buyers of 5,000 contracts on the session.
Fundamentals: Export inspections yesterday morning came in at 400,937 metric tons, this was a hair above the top end of the expected range which came in from 200,000-400,000 metric tons; last week’s came in at 280,243 metric tons. Dry weather through some key wheat growing areas continues to offer support to prices, forecasts are suggesting that those areas are to remain mostly dry for the next 1-2 weeks. We will have estimates for Thursdays WASDE report in tomorrow’s Grain Express.
Technicals: The market rallied off of support yesterday, trading in an inside day (trading within the previous day’s range). Prices are under a little pressure higher this morning, but the bulls remain in control. First technical support comes in from 493 ¼-499 ½. If the market consolidates above this pocket this week, we will likely have a bull flag on the chart. The 50-day moving average crossed over the 100-day moving average last week which is known as the “golden cross’, this is viewed as a very bullish set up.
Bias: Neutral/Bullish
Resistance: 516 ¾-518 ½***, 535-538 ¾**, 550***
Support: 493 ¼-499 ½**, 478-481 ½***, 451-453****
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