Daily Grain Market Update (5.7.18)
May 07, 2018
Last Week’s Close: July corn futures finished last week’s trade up 7 cents, this after trading in a range of 9 ¼ cents. Friday’s Commitment of Traders report showed that funds were aggressive buyers, adding 72,158 futures to their net long position which now stands at 186,276. Keep in mind that this data is for April 17th to May 1st.
Fundamentals: Corn has received a lot of help and support from dryness in Brazil over the past two weeks. The crop in Brazil is in the important pollination phase so this will be something to keep a closes eye on. As far as weather goes in the states, it looks like producers have been able to get a lot of field work done recently. This afternoons planting progress report is expected to show us roughly 31% complete with planting. Corn futures have also been receiving spill over support from the wheat market. Last week we cautioned that a pull back in wheat would put the breaks on the corn rally, it appears that is what we are seeing in the overnight/early morning trade.
Technicals: Corn futures staged a very impressive rally over the last two weeks but are starting to take a breather here to start the week. Last week the RSI (Relative strength index) reached its highest point in roughly two months, which started to signal the market was running hot. We are still friendly the corn market but believe a pull back would be healthy and welcomed. Previous resistance now becomes first technical support, that comes in from 398 ¼-402 ¾. A break and close below this pocket could encourage some long liquidation from the funds and press prices down towards....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Last Week’s Close: July soybean futures finished last week’s trade down 20 ¼ cents, this after trading in a range of 33 ½ cents. Friday’s Commitment of Traders report showed that funds bought 8,367 futures from April 17th to May 1st; this puts their net long position at 178,282 futures.
Fundamentals: Soybeans saw a choppy trade last week as market participants searched for new news to give the market more clarity; in regard to a clear direction. There were headlines last week that China and the US would have some sort of an announcement in terms of an agreement, it turns out that the agreement was to continue talking (shocking). Good weather here in the states has likely offered the opportunity for producers to catch up on a lot of field work, we should see that confirmed in this afternoons planting progress report. One thing to continue to keep an eye on is the soybean meal market, it will likely continue to influence soybean prices.
Technicals: Soybean futures have been forming a little bit of a wedge over the last two months, marking higher lows and lower highs. This type of formation can lead to a bigger directional move, either a breakout or a breakdown. As of this morning it appears the odds favor the breakdown as prices are testing our first support pocket which we outlined last weeks as 1026 ½-1027 ¾. A break and close below this pocket would likely encourage long liquidation from the funds which could push prices down towards our next pocket from....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Last Week’s Close: July wheat futures finished last week’s trade up 25 ¾ cents, this after trading in a range of 37 ¾ cents. Friday’s Commitment of Traders report showed that funds had bought 31,567 futures contracts from April 17th to May 1st. The managed money net position is now at -18,940 futures.
Fundamentals: Wheat futures saw a lot of strength last week with the Chicago futures contract benefiting from the sharp rise in the Kansas City futures contract. We believe that the KC contract will continue to be the leader this week. Last week’s wheat tour confirmed what a lot of people had suspected and that was a poor winter wheat crop. By the end of the week there were no more bullish headlines which led to profit taking from the recent buyers. The weekly crop progress report will be released after the close today, there is not expected to be a significant change in the good/excellent ratings from last week.
Technicals: Wheat futures rallied hard over the past two weeks which had brought prices to levels not seen in nearly a year. The big move higher had the RSI nearing 70, a benchmark for “overbought” conditions. The market is trading below technical support this morning, the next pocket we have on our radar is 510 ½-513 ¼. A break and close below this pocket opens the door for an acceleration of selling which could press prices back below....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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