Daily Grain Market Update (7.9.18)
Jul 09, 2018
Last Week’s Close: December corn finished Friday’s session up 8 ½ cents, giving futures a 1 cent gain on the week after trading in a 15 ½ cent range. Due to the 4th of July holiday last week, the weekly Commitment of Traders report was delayed until later today.
Fundamentals: The market saw a nice short covering rally on Friday, in part thanks to spill over strength from beans. Crop progress will be released after the close, analysts aren’t looking for any major changes from last weeks 75% good/excellent rating. Thursday the USDA will release their monthly report, we are not expecting this to have a significant impact on near term pricing. Early estimates for yields are 174.9 bushels/acre. Weather will arguably be the key catalyst over the next month, if key areas in the corn belt start to dry up we could see a premium come back into the market.
Technicals: The market managed not only rallied on Friday but held those gains into the close, a sight for sore eyes. That momentum has not carried over into the Sunday night/Monday morning trade, we are taking this price action with a grain of salt. We will get more participation on the floor open which will give us a better idea on the tone for today’s session. 376 ¼-379 ¼ is a big barrier in our minds, if the bulls can achieve consecutive closes above this pocket, we would expect to see additional short covering come into the market. On the support side of things....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: November soybeans finished Friday’s session up 39 ¾ cents, giving futures a gain of 14 ¾ cents on the week after trading in a range of 43 ½ cents. Due to the 4th of July holiday last week, the weekly Commitment of Traders report was delayed until later today.
Fundamentals: Soybeans saw a huge short covering rally on Friday as tariffs went into full affect in what was a classic buy the rumor sell the news type of event. The “trade war” is far from over so new headlines will still have an impact on short term pricing. Crop progress will be released after the close, analysts aren’t looking for much change from last week’s 71% good/excellent rating. Weather will continue to be important over the next 1-2 months as the crop continues to develop. If the Midwest misses on moisture, we could see the market catch a bid. Thursday the USDA will release their monthly report, we are not expecting this to have a significant impact on near term pricing. Early estimates for yields are 48.6 bushels/acre.
Technicals: The market has not been able to find any carry over momentum from Friday’s huge short covering rally, perhaps we will see they buying interest pick up when we get more participation on the floor open. Friday’s rally led to the first weekly gain in 6 weeks which brought the RSI out of oversold territory for the first time since June 11th. Our 3-star resistance remains intact from 897 ¾-901 ¾, consecutive closes above this pocket could open the door for another round of short covering towards 921 ¾-923 ½. On the support side of things, the bulls do not want to see a close back below 879. From the risk/reward perspective we think there is an opportunity to look long here, we are giving our bias a bullish tilt to start the week.
Resistance: 897 ¾-901 ¾***, 921 ¾-923 ½****
Support: 879***, 857-864****, 844 ¼**, 825****
Last Week’s Close: September wheat futures finished Friday’s session up 8 ½ cents, expanding gains for the week to 11 ¾ cents on the week after trading in a range of 36 ¾ cents. Due to the 4th of July holiday last week, the weekly Commitment of Traders report was delayed until later today.
Fundamentals: Wheat caught a nice bid in the back half of the week on global production concerns. Areas in the Black Sea, France, Germany, and others are expecting to see a drop-in yield. We think a lot of this has been priced into the market. If corn and beans continue to rally, perhaps wheat could benefit from spill over strength. Crop progress will be released after the bell today, we are looking for spring wheat conditions to be unchanged from last week at 77% good/excellent.
Technicals: The market is pressed up against significant resistance which we have had outlined as 510 ½-513 ½, this pocket represents the 50% retracement and 100 day moving average. The market searched for stops above this pocket on Friday but was unable to encourage additional buyers to step in. Today’s price action will be key in setting the tone for the rest of the week. A close above resistance opens to door for an extension towards 522-524 ½. On the support side of things, there’s not a lot 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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