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Grain Market Update (4.3.18)

Published on: 13:02PM Apr 03, 2018

CORN (May)

 

Yesterday’s Close:  May corn futures finished yesterday’s session down ¼ of a cent, trading in a range of 5 ½ cents.  Funds were estimated buyers of 3,500 contracts. 

 

Fundamentals:  Weekly export inspections yesterday morning came in at 1,348,992 metric tons.  This was towards the top end of the expected range from 1,000,000-1,400,000 metric tons and a notch above last week’s 1,330,000 metric tons.  China has imposed a 15% tariff on ethanol imports from the United States but many analysts believe this will be relatively short lived as China needs the US imports to meet fuel standards.  With the USDA report behind us, market participants will start to focus on weather in the states as producers get ready to plant.  Any significant changes in price or weather could swing some acres so expect to hear a lot of jawboning in the coming months.  This should keep the volatility elevated and present a lot of great trading and marketing opportunities.

 

Technicals:  Corn futures failed at the open yesterday which is why we often take the overnight trade with a grain of salt; we believe that volume confirms price.  The inability to get out above 393 ¾-395 ¼ led to some profit taking and likely encouraged producers who missed out on these prices last time around to be a little more proactive.  We started reducing some long exposure for clients yesterday but remain friendly the market.  387 is the area we talked about on RFD-TV yesterday morning as being first support, but the more significant 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.

 

SOYBEANS (May)

 

Yesterday’s Close:  May soybean futures finished the day down 7 ½ cents, trading in a range of 25 ¼ cents.  Funds were estimated sellers of 8,000 contracts on the day.

 

Fundamentals:  Yesterdays export inspections came in at 542,434 metric tons, this was within the expected range from 300,000-700,000 and below last week’s print of 710,000 metric tons.  Fears that China will slap a tariff on US Soybeans continues to linger over the market, but we are not putting too much weight into that headline.  There might be some jawboning to work prices lower, but we think there is are other forces at work that caused yesterday’s reversal.  February crush came in at 164.959 million bushels, this was just above the trade expectations of 163.5 million bushels.  As with corn, attention will start to turn towards weather in the states as producers start ramping up for planting season.  Any significant changes in price or weather could swing some acres so expect to hear a lot of jawboning in the coming months.  This should keep the volatility elevated and present a lot of great trading and marketing opportunities.

 

Technicals:  Soybeans are finding some strength in the early morning session, but the bulls will want to see confirmation from increased volume on the floor open.  1049 gave way yesterday which opened the door to our next support pocket from 1034 ½-1038 ¼ which heled beautifully.  The first test is an opportunity for shorts to lighten up some exposure in hopes of adding at better prices.  A retest of this pocket will likely give way and open the door to additional long liquidation from the funds.  There is minor support at 1028, but the more significant 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.

 

WHEAT (May)

 

Yesterday’s Close:  May wheat futures finished the session down 5 cents, trading in a range of 11 ½ cents.  Funds were estimated sellers of 3,500 contracts.

 

Fundamentals:  Export inspections yesterday morning came in at 361,723 metric tons, this was with the range of expectations from 275,000-425,000 metric tons; last weeks read came in at 344,000 metric tons.  Yesterdays crop progress report showed that winter wheat is at 32% good/excellent.  It will be interesting to keep an eye on this going forward as some areas have been struggling with the lack of moisture.  We will continue to keep a close eye on the Kansas City futures contract as it will likely be the leader in the market. 

 

Technicals:  The market is continuing to consolidate as the market is likely setting up for another move.  Looking at the chart, we would believe that the chances of a breakdown are better than a break out.  If the market breaks down below 440, we would expect to see a run at our support pocket from....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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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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