CORN (May)
Yesterday’s Close: May corn futures finished the day up 1 cent, trading in a range of 3 ½. Funds were estimated buyers of 3,000 contracts.
Fundamentals: The overnight grain trade has been lower due to retaliatory tariffs from China to the tune of 3 billion dollars including products like steel, pork, fruit, and wine. We are keeping an eye on soybeans as they could be a bigger target down the road, this would send ripple effects into the other grain markets like corn. Export sales this morning came in at 1,470,000 metric tons, this compares with the expected range from 1,400,000-2,100,000 metric tons; last week’s came in at 2,505,000 metric tons. Attention is on next week’s Prospective Plantings and Quarterly Stocks report which will be out on the 29th at 11 am cst. Informa Economics has US corn acres at 88.9 million acres, this is down slightly from the 89.2 million acres.
Technicals: The market is trading below support this morning, but we are taking the price action with a grain of salt due to headline risks during light volume trade. The bulls need to see stabilization above 371 ¾ on a closing basis, a failure to do so could lead to some additional long liquidation and position squaring down towards the 100-day moving average which comes in at 367 ¾. This would do a lot of technical damage to the chart and would likely lead to a choppy two-sided trade in the near term.
Bias: Neutral
Resistance: 378 ¾**, 382-383****, 393 ¾-395 ¼***
Pivot: 371 ¾
Support: 367 ¾**, 361 ¾-363****, 353 ¾**
SOYBEANS (May)
Yesterday’s Close: May soybean futures finished the day down ¾ of a cent, trading in a range of 13 ¼ cents. Funds were estimated sellers of 2,000 contracts.
Fundamentals: Beans are trading lower overnight on the back of retaliatory tariffs from China; so far these have not been pointed at beans, but the first shots have some traders nervous. The jawboning alone could continue and give China the opportunity to buy at lower prices while avoiding a bigger problem. Aside for tariff talk, market participants are gearing up for next week’s Prospective Plantings and Quarterly Stocks report which is due out on the 29th at 11am cst. Informa Economics has their estimate at 91.5 million acres, this is up .28 from their previous estimate. This morning’s Export Sales came in at 759,000 metric tons, this compares with the expected range from 700,000-1,400,000 metric tons; last week’s came in at 1,270,000 metric tons.
Technicals: The market broke down below support in the overnight session which led to a whoosh towards our next ethical support pocket which we have listed as 1006 ½-1009 ¾. If the market can stabilize back above 1021 ¾ into the weekend, we could see that lead to consolidation into the report next week. First technical resistance remains at 1038 ¾ with the trend changing pocket not coming in until 1049-1055, bears are in control until a close above here.
Bias: Bearish
Resistance: 1038 ¼-1041 ¾***, 1049-1055****, 1070 ¼**
Pivot: 1021 ¾
Support: 1006 ½-1009 ¾****, 994 ¼-998 ½****
WHEAT (May)
Yesterday’s Close: May wheat futures finished the day up 2 ¼ cents, trading in a range of 8 ½ cents. Funds were estimated buyers of 2,000 contracts.
Fundamentals: Grain markets are taking heat this morning on concerns that China could retaliate with their own tariffs on agricultural products, so far it has just been products like steel, pork, fruit, and wine. Weekly Export Sales this morning came in at 265,000 metric tons, this compares with the expected range from 150,000-500,000 metric tons; last week’s came in at 163,000 meric tons. Prospective Plantings report is right around the corner and estimates are rolling out. Informa Economics has US wheat acres at 46.1 million acres, this was up 30,000 from their previous estimate.
Technicals: The market has been hovering just below the 100-day moving average and above that psychologically significant 450 handle. If the market sees a conviction close below this level it will open the door to a run at contract lows from 423 ¾-426 ¾. There has been an extreme amount of technical damage over the last two weeks which will likely keep the bears in control for a while. Significant resistance comes in from 466-467 ¾, a close above that will neutralize the bearishness but will not be enough to reverse the tide.
Bias: Bearish
Resistance: 466-467 ¾***, 494-495**, 516 ¾-518 ½***
Support: 450-455 ¾***, 423 ¾-426 ¾****
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