Daily Grain Market Update (4.27.18)
Apr 27, 2018
Yesterday’s Close: July corn futures finished the day up ¼ of a cent, trading in a range of 3 cents. Funds were estimated sellers of 4,000 contracts.
Fundamentals: Weekly export sales came in at 620,481 metric tons, this was well below the analyst’s expectations of 1,000,000-1,400,000 metric tons. There was a sale of 107,600 metric tons sold to unknown. Weather is important in the near term, but perhaps more so in South America than the US. Argentina is estimated to be 31% complete with harvest, and early reports are for lower yields than previously expected. Weather in the states looks to be clearing which is giving some producers a nice window to get more active in the fields. Updated planting progress will be released Monday afternoon.
Technicals: As mentioned yesterday, previous resistance now becomes support. In yesterday’s report we had listed that as 390 ¼-393. Prices did retreat and test the first level and held perfectly. The chart is shaping up to be rather constructive for a run at the 400 ½-402 ¾ mark. This pocket represents the top end of the range over the last two months. With time, we ultimately believe that the market can trade above this pocket. The market is in a bit of a wedge since the middle of March. We have seen lower highs and higher lows since that time. This formation typically sets up for a bigger directional move, either a breakout or a breakdown. We continue to feel the odds favor the bull camp at this point in time.
Resistance: 400 ½-402 ¾****, 411-412 ¾***, 425 ¾-426 ½**
Support: 390 ¼-393***, 379 ½-383 ½****, 377 ½**
Yesterday’s Close: July soybean futures finished the day up ¾ of a cent, trading in a range of 10 ¾ cents. Funds were estimated to have been near flat on the day (in terms of buying/selling).
Fundamentals: Weekly export sales yesterday morning came in at 537,803 metric tons, this was well below the expectations of 800,000-1,400,000 metric tons. Though the seasonal trend is for exports to sag this time of year, bulls will want to see them firm in order to get another leg higher. We have not seen anything from China recently which has weighed on the market. Argentina is estimated to be 54% complete with their harvest. Early reports are for lower yields than previously expected. Weather in the states has started to clear which has lessened the concern of corn acres moving to beans.
Technicals: The market is trapped in “no mans land”. As mentioned on RFD-TV yesterday, we would not be surprised to see the market stay rangebound from 1025-1050 until we get a new fundamental catalyst to give us new direction. A breakout above 1050 could encourage momentum traders to take us back towards 1071 ¼-1078. On the flip side, a retest to 1026-1027 ¾ could encourage long liquidation down to 1013-1016. This pocket represents a key retracement and the 200-day moving average.
Resistance: 1051***, 1060 ¾-1064 ½**, 1071 ¼-1078***
Support: 1025 ¾-1027 ¾***, 1013-1016***
Yesterday’s Close: July wheat futures finished the session down 9 ¼ cents, trading in a range of 17 cents. Funds were estimated to have been sellers of 5,000 contracts for the day.
Fundamentals: There is still a lot of jawboning back and forth between recent weather and the impact on the yields. Price precedes news so take the headlines with a grain of salt. The wheat tour kicks off on May 1st, this will be something to keep an eye on. We will get a good idea on the broad crop, not just isolated areas. Yesterday’s weekly export sales report came in at 577,904 metric tons, this was above expectations of 50,000-500,000 metric tons.
Technicals: Previous resistance became support and held well yesterday. That remains intact from 486-488 ½. If the market breaks and closes below, we would expect to see the market trade another 10-15 cents lower. On the resistance side of things, the bulls want to try and reclaim the psychologically significant $5 handle, this could open the door to 508 ½-510 ½. In the bigger picture, we remain neutral as prices linter in the middle of this year’s range. We are wanting to see more conviction with technicals and fundamentals aligning.
Resistance: 508 ½-510 ½**, 524 ¼-531 ¾****
Support: 486-488 ½****, 472 ¾-475 ¼***, 459-461 ¾****
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