Daily Grain Market Update (4.30.18)
Apr 30, 2018
Last Week’s Close: July corn futures finished last weeks trade up 13 ¼ cents, trading in a range of 13 ¾ cents. This was the biggest 5-day rally of the year. Friday’s Commitment of Traders report showed that funds sold 12,271 futures, this puts their net long position at 114,118. Keep in mind that the Commitment of Traders report is for April 17th-April 24th.
Fundamentals: The grain markets opened up Sunday night with follow through momentum to the buy side coming from last week’s trade. Activity has picked up in the corn belt as producers have reportedly been taking advantage of the weather window to plant. This afternoons planting progress report is expected to show us at roughly 20% planted, this would be just behind the five-year average pace of 27%; last week’s report showed we were just 5% planted. With prices climbing and seeds getting in the ground, we would not be surprised to see some resistance come in the form of hedging. Weather will become more meaningful to price in the intermediate term.
Technicals: The market is attempting to mark its sixth consecutive close higher today, this would be the longest streak since late December. The recent run has brought prices to our resistance pocket from 400 ½-402 ¾. This pocket represents the top end of the range over the last 2 months. Though we have been and remain friendly corn, we are working with clients to reduce long exposure. If the bulls can chew through resistance and achieve a conviction close above, we could see an extension towards 411-412 ¾. On the support side of things, 396 ¼-396 ½ is the first pocket the bulls need to defend.
Resistance: 400 ½-402 ¾****, 411-412 ¾***, 425 ¾-426 ½**
Support: 396 ¼-396 ½***, 390 ¼**, 379 ½-383 ½****
Last Week’s Close: July soybean futures finished last weeks trade up 15 ¼ cents, trading in a range of 30 ¼ cents. Friday’s Commitment of Traders report showed that funds sold 18,248 futures contracts, this puts their net long position at 169,915. Keep in mind that the Commitment of Traders report is for April 17th-April 24th.
Fundamentals: Soybean futures are feeding off of Friday’s momentum to start the week, we will want to see volume confirm price on the floor open. Strength in the soybean meal market is certainly offering support to the soybeans recently. The meal market is on the verge of a breakout to new contract highs which would likely continue to be beneficial for soybeans. Better weather in the Midwest has allowed farmers to get corn in the ground which has also alleviated some concerns that we would see some corn acres switch to beans. This afternoons planting progress report is expected to come in at 6% complete. Bulls will want to see better exports this week.
Technicals: Soybean futures broke out above the 50-day moving average last week after holding significant support perfectly earlier in the week. The market is now trading in the middle of the next resistance pocket which we had outlined as 1060 ¾-1064 ½. If the market holds ground on the floor open, we could see prices continue to work higher. The market has been mostly range-bound for the better part of the last 2 months, because of this we are keeping our bias at neutral until we get more conviction on intermediate term direction.
Resistance: 1060 ¾-1064 ½**, 1071 ¼-1078***, 1090 ¼***
Support: 1051 ½**, 1025 ¾-1027 ¾***, 1013-1016***
Last Week’s Close: July wheat futures finished last weeks trade up 20 ¾ cents, trading in a range of 36 ½ cents. Friday’s Commitment of Traders report showed that managed money sold 3,547 futures contracts, this brings their net short position to 50,507 futures. Keep in mind that the Commitment of Traders report is for April 17th-April 24th.
Fundamentals: Wheat prices have benefited recently from strength in the broader grain complex, the bulls will want to see volume confirm price when the floor opens this morning. This afternoons crop progress report is expected to show winter wheat conditions steady to 1% higher from last week. Spring wheat planting is expected to come in at 14% complete. The annual wheat tour starts this week, this will be something to keep a close eye on.
Technicals: Wheat futures have been a bit of a chop fest for the last month as the bulls and bears continue the endless tug of war match. Prices are testing first resistance this morning which we had outlined in last weeks report as 508 ½-510 ½. A conviction close above this level opens the door for a run at 524 ¼-531 ¾. If the bulls cannot achieve the breakout, we could see some profit taking take us back towards 496 ¾-498 ½.
Resistance: 508 ½-510 ½**, 524 ¼-531 ¾****
Support: 496 ¾-498 ½**< 486-488 ½****, 472 ¾-475 ¼***
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