Daily Grain Market Update (5.16.18)
May 16, 2018
Yesterday’s Close: July futures finished the day up 5 ¾ cents, this after trading in a range of 6 ½ cents. Funds were estimated to have been buyers of 12,500 contracts.
Fundamentals: Continued talk of a struggling crop in Brazil helped offer support to the market, but we feel that there is more going on behind the curtains. We continue to believe that demand will be a big factor in helping corn continue the rally. Talks of planting delays in some areas may also be offering some support to the market. We will get updated ethanol data in this morning’s weekly EIA report; that is due out at 9:30 am cst. Tomorrow morning, we will get the weekly export sales numbers from the USDA which will be released at 7:30am cst. Outside of these few tidbits, weather will be the key catalyst as the crop continues to get in the ground and starts to develop.
Technicals: The bulls managed to achieve a conviction close above our pivot point which we listed in yesterday’s report as 397 ¼. This strong close open the door for a run at the top end of the range which comes in from 407-408 ½. If the bulls can achieve a strong close above this pocket, it opens the door for a bigger move higher. If the bears defend the top end of the range, we could see some liquidation from the funds who have established a healthy net long position. First support going forward comes in from 394 ¼-397 ¼. This pocket contains the 50-day moving average, recent lows, and a key retracement from the years range. A break and close below will neutralize our bullish bias.
Resistance: 407-408 ½***, 425 ¾-426 ½**
Support: 394 ¼-397 ¼***, 390 ½**, 379 ½-383 ½****
Yesterday’s Close: July futures finished the day down 1 ½ cents, this after trading in a range of 20 cents. Funds were estimated to have been net sellers of 1,500 contracts.
Fundamentals: Soybean futures saw a choppy trade yesterday, thanks to some mixed signals in the soybean meal market. NOPA crush numbers were out yesterday for the month of April, bean crushings came in at 161.016 million bushels, this is historically high and 16% over last year’s level. April soybean meal stocks came in at 946,291 metric tons. Weather will be an important catalyst in the intermediate term but will have a more significant impact going out into the next few months. China’s Vice Minister is in Washington to discuss trade with the administration, that has not been much news from this, but we would expect to hear something within the next 24-48 hours.
Technicals: Soybean futures posted an inside day yesterday (trading within the previous day’s range). Key technical resistance remains intact from 1026 ½-1028 ¼ which will keep the bears in control until the market achieves a conviction close above here. On the support side of things, the first pocket we have our eye on comes in from 1001 ¾-1005 ¼, but the more significant pocket and our target comes in below that at 988 ¾-994 ¾. This pocket represents a key retracement along with the lows from the original “tariff talk” scare on April 4th.
Resistance: 1026 ½-1028 ¼***, 1040-1042 ½**
Support: 1001 ¾-1005 ¼**, 988 ¾-994 ¾****, 965 ¼-969 ½***
Yesterday’s Close: July wheat futures finished the session up 3 cents, this after trading in a range of 10 cents. Funds were estimated to have been sellers of 2,500 contracts.
Fundamentals: Wheat futures have been trending lower for the better part of the last two weeks but were able to get a relief rally in yesterday’s session. There has not been a lot of new news on the wires which continues to give the technical traders an advantage for the time being. Weekly export data from the USDA will be released tomorrow morning at 7:30, perhaps this will give market participants something to talk about.
Technicals: Yesterday’s relief rally is spilling over into some momentum this morning, but we don’t expect much to come of it. The bears have been and continue to be in control of this market. Technical resistance this morning comes in from 499-502 ¾, only a close above this level will start to neutralize the chart. On the support side of things, the objective remains 477 ½-482 ¾. This pocket represents a key retracement on the years range, along with the 100 and 200 day moving average.
Resistance: 499-502 ¾***, 523-524**, 543 ½-545***
Support: 477 ½-482 ¾****, 467 ¾**, 458 ¾-463***
Sign up for a free trial of 1 or all 5 of our daily Blue Line Express commodity reports!
Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.