Daily Grain Market Update (4.23.18)
Apr 23, 2018
Last Week’s Close: July corn futures traded 8 cents lower for the week, trading in a 9 ¼ cent range. Friday’s Commitment of Traders report showed funds sold 43,496 futures, this reduces their net long position to 126,389 futures. Keep in mind this data is for April 10th-April 17th.
Fundamentals: With May options off of the board we are shifting our focus to the July contract (for the daily reports). Weather will continue to be a leading catalyst this week, mostly because there is nothing else to talk about yet. There are some “concerns” over planting delays in areas, we are not putting much weight into that just yet; when push comes to shove, farmers will get the crop in the ground. The weekly crop progress report will be released after the close today, that is expected to show corn 7% planted. This would be a 4% increase from the previous week, but still lags the 5-year average of 18%.
Technicals: Corn futures have been bleeding lower for the better part of the last two weeks as managed money tightens the books a bit. First support this week comes in from 379 ½-383 ½. This pocket represents the 100 and 200 day moving average, previous support at the end of March, and the 50% retracement (middle of the range) from the January 12th lows to the March 13th highs. We continue to be friendly the corn market, but this level must hold on a closing basis for us to keep our bullish bias. A break and close below could encourage some additional long liquidation from the funds. On the resistance side of things, the first pocket comes in from 387 ¼-389 ½. This pocket represents a key retracement, support last week, and the 50-day moving average.
Resistance: 387 ¼-389 ½**, 392 ½-393***, 400 ½-402 ¾****
Support: 379 ½-383 ½****, 377 ½**, 362-365 ¼***
Last Week’s Close: July soybean futures finished the week down 21 ½ cents, trading in a range of 30 cents. Friday’s Commitment of Traders report showed funds bought 18,624 futures, this extends their net long position to 188,163 futures. Keep in mind this data is for April 10th-April 17th.
Fundamentals: With May options off of the board, we are turning our attention to the July futures contract (for the daily reports). As with corn, weather will continue to be a leading catalyst for the time being. Concerns over corn planting delays could keep the chatter going with regards to more acres moving to soybeans, this has helped keep a lid on the market recently. Though we do not have any serious concerns on that, the market is making calculations for the chance. Harvest in Brazil is all but complete with over 90% out of the field, this is on pace with last year and the 5-year average.
Technicals: The market trickled lower for the majority of last week, and we would not be surprised to see that continue into weakness to start this week’s trade. The market is firm this morning, but we will want to see volume confirm price on the floor open. The bulls need to reclaim 1050 on a closing basis to sleep better at night. A failure to regain ground could lead to some long liquidation from the funds. There is not a lot of significant support until 1025 ¾-1027 ¾. This pocket represents the 100-day moving average, previous support in March, and the 50% retracement (middle of the range) from the January 12th lows to the March 2nd highs.
Resistance: 1050***, 1060 ¾-1064 ½**, 1077-1078***
Pivot: 1042 ½
Support: 1025 ¾-1027 ¾***, 1013-1016***, 988 ¾-994 ¾****
Last Week’s Trade: July wheat futures finished the week down 12 ¼ cents, trading in a range of 17 ¾ cents. Friday’s Commitment of Traders report showed funds were sellers of 2,099 futures, this expands their net short position to 46,960 futures. Keep in mind this data is for April 10th-April 17th.
Fundamentals: Weather has been a near term catalyst for wheat prices and we are expecting to see that continue. We are continuing to keep a close eye on the KC wheat contract, as it will likely be the leader for Chicago futures. Some areas got some much-needed moisture over the weekend, much of that was likely priced in on Friday’s session. This afternoons weekly crop progress report is expected to show an improvement in crop ratings. Last weeks good/excellent rating came in at 31%, traders are looking for 33-35% this week.
Technicals: First technical support this morning comes in from 472 ¾-475 ¼. This pocket represents the 100-day moving average, previous resistance at the end of March, and the 38.2% Fibonacci retracement from the January 16th lows to the March 2nd highs. A break and close below will likely accelerate selling which could press prices back towards 459-461 ¾. On the resistance side of things, bulls need to reclaim 486-488 ½ to get the ball rolling in their direction. This pocket represents the 50 and 100 day moving average, along with the 50% retracement (middle of the range) from those January lows to March highs.
Resistance: 486-488 ½****, 494-496 ¾***, 508 ½-510 ½**
Support: 472 ¾-475 ¼***, 459-461 ¾****, 440 ¼**
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