Daily Grain Market Update (5.31.18)
May 31, 2018
Yesterday’s Close: December corn futures finished yesterday’s session down 6 ¾ cents, this after trading in a range of 7 ¾ cents. Funds were estimated to have been sellers of 24,000 contracts.
Fundamentals: Corn prices continued to plummet yesterday on the back of a great first look at crop ratings and a forecast that looks favorable for early crop development. With that said, it is far too early to suggest that the top is in, this crop has a long way to go in a relatively short amount of time. Funds have been heavy sellers this week, but we would be surprised to see the long liquidation continue at this rate so early in the season when so many things can still go wrong. Due to the shortened holiday week, the weekly export sales report will be released Friday at the same time as usual (7:30am cst).
Technicals: Grain futures are finding some reprieve in the overnight and early morning session, but the light volume trade should be taken with a grain of salt. The past two sessions erased gains for the whole month of May which has some traders/market participants running for the hills. We used yesterday afternoons price action to work with clients on getting long exposure back on. As the old saying goes, buy when people are fearful, sell when people are greedy. First technical support for today’s session comes in from 388 ½-390 ½. This pocket represents a key retracement, yesterday’s lows, and the 100-day moving average. On the resistance side of things, 398 ½-399 ¾ is the pocket the bulls need to close back above to get the market working back towards the top end of the range.
Resistance: 398 ½-399 ¾****, 408 ¼-412 ¼****, 425 ¾-426 ½**
Support: 390 ½**, 379 ½-383 ½****
Yesterday’s Close: July soybean futures finished yesterday’s session down 12 ¼ cents, this after trading in a range of 17 cents. Funds were estimated to have been sellers of 6,500 contracts.
Fundamentals: Soybeans were not immune to yesterday’s long liquidation in the grain sector as funds and producers were actively reducing risk. Much of the risk off attitude comes on the back of rocky trade negotiations with China continue. Ripple affects from the trucker strike in Brazil likely helped alleviate a little pressure from the market. Rains are in the forecast which could delay the last ¼ of planting, this will be something to watch for going into the weekend, if the forecast continues to show rain into tomorrow afternoon, we would not be surprised to see some premium come into the market. If it is a non-event rain, we would look for a gap lower on Sunday night. Weekly export sales are pushed back to Friday morning, 7:30am cst.
Technicals: The market broke down through the 50% retracement and held our support pocket from 1013-1016 perfectly yesterday; this provided an opportunity for sellers to reduce their exposure and for traders to buy a short-term dip. A retest of this support pocket will likely give way and open the door for accelerated selling pressure. The next significant support pocket comes in from....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Yesterday’s Close: July Chicago wheat futures finished yesterday’s session down 15 ¼ cents, this after trading in a range of 18 ¼ cents. Funds were estimated to have been sellers of 9,000 contracts.
Fundamentals: Wheat saw follow through selling yesterday as the market continued to digest the recent crop ratings and the improving forecast for some areas. If weather conditions improve over the weekend and we see another uptick in crop ratings next week, expect the selling to recommence. We will continue to keep a close eye on corn and beans as any of their weakness or strength could spill over into the wheat market.
Technicals: On the technical side of things, the recent pull back is likely welcomed by bulls who want to put exposure back on at lower prices. With that said, there is not a lot of technical support until....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
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