Daily Grain Market Update (6.1.18)
Jun 04, 2018
Last Week’s Close: December corn finished Friday’s session down 2 ¼ cents, putting prices down 14 ½ cents for the week. Fundamental headlines led to increased volatility and technical selling. December corn traded in an 18 ¼ cent range for the week. Friday’s Commitment of Traders report showed that funds sold 10,145 futures contracts from May 22nd-May 29th, shrinking their net long futures position to 180,790.
Fundamentals: Good weather over the weekend coupled with continued concerns with regards to trade has left a lot of gaps on the grain charts and corn is not immune. We anticipate the trade chatter to continue, so do not be surprised to see the volatility stick around a little bit longer. This afternoon’s Crop Progress report is expected to show that the US corn crop is 97% planted.
Technicals: Corn futures gaped lower on the Sunday night open, trading at their lowest price since April 25th. Recent fundamental headlines have triggered multiple rounds of profit taking from both funds and producers. The selling fed on itself last week as several key technical levels were violated. First technical support to start the week comes in from 402 ¼-404 ½. This pocket represents the lows of late April, the 100-day moving average, and the 50% retracement (middle of the range) from the July 2017 highs (which coincided with highs on May 24th) to the December 2017 lows. On the resistance side of things, the first pocket the bulls need to reclaim on a closing basis comes in from 410 ¼-413. Keep in mind that volume confirms price, so the floor open will be more telling than the overnight trade.
Resistance: 410 ¼-413***, 417 ¾-419****, 429 ½**
Support: 402 ¼-404 ½****, 397 ½-398 ½***, 391 1/2**
Last Week’s Close: November soybean futures finished Friday’s session up 5 ½ cents, this trimmed the losses for the week to 12 ½ cents. Friday’s Commitment of Traders report showed that funds were buyers of 8,794 future contracts from May 22nd-May 29th, expanding their net long futures position to 103,590.
Fundamentals: Continued trade concerns and beneficial forecasts were two of the leading catalysts for the softer price action last week and we are expecting that to hold true for this week’s trade too. If the “trade war” escalates we would expect to see the selling accelerate as funds and producers rush to lock in profits and hedge prices. We will also be keeping an eye on other grain markets like corn and wheat, their strength/weakness could spill over into the bean pit.
Technicals: Futures gaped lower on the Sunday night open on the back of bearish fundamental headlines. With that said, we take the overnight sessions with a grain of salt due to the light trade volume. Combining the technicals with the fundamentals, we continue to believe the bears hold the advantage in the intermediate term. First technical support for the week comes in from 1020 ¾-1025 ¼. This pocket represents a key retracement on the year, the 100-day moving average, and the beginning of the top of the gap from May 21st. A break and close below could open the door for a push 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 wheat futures finished Friday’s session down 1 ¾ cents, expanding losses for the week to 21 ½ cents. Friday’s Commitment of Traders report showed that funds were buyers of 17,007 futures contracts from May 22nd-May 29th, putting their net long futures position at 25,826 contracts.
Fundamentals: Good weather over the weekend led to a weaker Sunday night in corn, soybeans, and wheat which has all seemingly fed on itself. With that said, the overnight session is on light volume and the floor open will be more telling. We will continue to keep a closes eye on the winter wheat harvest which means the Kansas City futures contract will need to be monitored closely. As of right now, it seems that some “worst case scenario” concerns are alleviated some. Trade negotiations were also playing into the weakness last week, we expect more headlines on this front soon. The only seemingly important bullish catalyst left is hot and dry weather in the Black Sea region, but will it be enough to support near term prices is the question.
Technicals: The market started off strong last week, posting its highest high in nearly a year. That initial thrust higher surely had a lot of weak shorts running for the hills and covering positions; only to reverse on the same day and trading lower for the majority of the week. The chart has been neutralized on last weeks weakness, but the fundamental headlines give the nod to the bears in the near term. There is not a whole lot of significant 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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