Daily Grain Market Update (6.22.18)
Jun 22, 2018
Yesterday’s Close: December corn futures finished yesterday’s session up 5 cents, trading in a range of 9 ½ cents. Funds were estimated buyers of 8,500 contracts.
Fundamentals: The market traded in a tamer fashion yesterday, catching its breath after the surge in volatility earlier in the week. Export sales yesterday morning came in at Weekly export sales came in at 505,600 metric tons, below expectations of 850,000-1,450,000 metric tons. Attention will turn back to weather over the weekend which will likely make things interesting for the Sunday night open. Favorable weather is expected and likely priced into the market at these levels, even a slight a miss on this could put some premium into the market.
Technicals: Previous technical support now becomes resistance, we have defined that as 376 ¼-379 ¼. The market has tested this pocket for four straight sessions but has not been able to achieve a close above. If the bulls can achieve a conviction close above this pocket, we could see additional short covering come into the market. The next line in the sand for resistance doesn’t come in until 387 ¾. We continue to feel that the “flush out” earlier in the week has presented some great risk/reward buying opportunities in corn.
Resistance: 376 ¼-379 ¼***, 387 ¾**, 397 ½-399 ¼****
Support: 369-371***, 359-360 ½****, 345 ½-350****
Yesterday’s Close: November soybean futures finished yesterday’s session down 11 cents, trading in a range of 13 ¼ cents. Funds were estimated sellers of 10,500 contracts.
Fundamentals: Soybeans traded lower yesterday due to what we are referring to as a “buyers strike”. The bloodbath earlier in the week coupled with lingering trade concerns has kept buyers on the sidelines. Though we believe a lot of the trade news is priced into the market, we will continue to keep our eyes on the wires and ear to the ground. Weekly export sales came in at 529,300 metric tons, towards the low end of estimates of 400,000-1,000,000 metric tons.
Technicals: The recent consolidation has been a sigh of relief for traders, as volatility contracts the fundamentals and technicals can become more relevant again. The bulls have been defending technical support well over the past two sessions and it will be important for them to do it again going into the weekend. We have defined support as 989 ½-900 ¾ and believe there’s a good risk/reward trade to the buy-side here. On the resistance side of things, there’s not a lot until 921 ¾-923 ½. If the bulls can close out above this level that could encourage additional short covering towards 935-939 ½.
Resistance: 921 ¾-923 ½****, 935-939 ½***, 946 ½-950***
Support: 898 ½-900 ¾***, 857-862****
Yesterday’s Close: July wheat futures finished yesterday’s session up 7 cents, trading in a range of 16 ½ cents. Funds were estimated buyers of 5,000 contracts.
Fundamentals: The wheat market has held together much better than corn and beans, thanks to continued concerns that hot and dry weather in the Black Sea region could limit yields and production. Some estimates are for Russian production to be over 20% less than that of last years (*which was a record crop). Weekly export sales yesterday came in at 461,600 metric tons, towards the top end of expectations from 250,000-500,000 metric tons.
Technicals: The market has been technically sound this week, finding and holding support earlier in the week and now testing and so far, failing against technical resistance. 497-499 ¾ has been a level we have had as a target since the beginning of the week, this pocket represents the 100-day moving average and the gap from June 15th. This would be an area for bears to consider selling and recent buyers to reduce exposure. We have our bias as neutral still but will be looking for slightly higher prices to move that closer to bearish.
Resistance: 497-499 ¾***, 507 ½**, 523***
Support: 477 ½-483***, 459-467 ½****
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