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Grain Market Update (4.6.18)

Published on: 13:04PM Apr 06, 2018

CORN (May)

 

Yesterday’s Close:  May corn futures finished the session up 8 ¾ cents, trading in a range of 8 ¾ cents.  Funds were estimated buyers of 25,000 contracts on the day. 

 

Fundamentals:  The White House released a statement last night stating that they would be looking to add 100 billion of tariffs to China, this led to a gap lower in the overnight trade for grains.  Corn is down 4 ½ at the time of writing this and has been trading in a 5 ½ cent range.  The market seems less skittish on this news but perhaps the floor open will change that when more volume comes to the market.  Yesterday mornings export sales came in at 909,268 metric tons, this compares to the expected range of 1,000,000-1,300,000 metric tons; last week’s read came in at 1,353,000 metric tons.  There are already talks of colder and wetter weather leading to planting delays in some areas, this is not a major concern at the moment but something to keep an eye on as it could lead to some changing acres. 

 

Technicals:  The market has seen a nice uptick in volatility this week which has presented some excellent opportunities for the bulls and the bears.  In these market conditions, we feel it is important to stay nimble and take what the market gives you, especially if you’re trading options.  The market is trading in between support and resistance here this morning.  Technical support this morning comes in at 382 ¾, a break below opens the door to some long liquidation towards....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 yesterday’s session up 13 ¾ cents, trading in a range of 22 ¼ cents.  Funds were estimated buyers of 16,000 contracts.

 

Fundamentals:  The White House released a statement last night stating that they would be looking to add 100 billion of tariffs to China, this led to a gap lower in the overnight trade for grains.  Soybeans are down 19 cents at the time of writing this, they have been trading in an 18-cent range.  The first round of jawboning was not so concerning but round two is starting to raise caution flags.  We know South American prices have increased this week and there have even been talks of rationing.  If they do ration and a deal is made they will be in a bit of a pickle. Out side of tariff talk, we will be watching weather in the corn belt as some delays in corn could lead to a shift towards bean acres.  This is just talk right now and is not of significance yet.  Export sales yesterday morning came in at 1,491,134 metric tons, this was above the expected range from 600,000-1,050,000 metric tons. 

 

Technicals:  Soybean futures have offered up opportunities to both the bulls and the bears this week.  This is the type of market environment where you want to be nimble, especially if you’re trading with options (hedgers should stick to their plan).  The market gaped lower and tested support that we had listed in yesterdays report from 1002 ¼-1004 ¼, this pocket represents the 200-day moving average and a key Fibonacci retracement level.  A retest of this would likely lead to a breakdown.  The marker is hovering just above the 100-day moving average this morning; bulls want to see a close back above....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 yesterday’s session up 7 ½ cents, trading in a range of 9 ½ cents.  Funds were estimated buyers of 7,000 contracts.

Fundamentals:  The White House released a statement last night stating that they would be looking to add 100 billion of tariffs to China, this led to a gap lower in the overnight trade for grains.  Wheat managed to weather the storm extraordinarily well with the market trading higher at a point.  Colder temperatures over the weekend have helped offer support to the board.  Prices have since retreaded as market participants wait for the floor open to give more clarity.  Export sales yesterday morning came in at 109,000 metric tons this compares to the expected range from 200,000-500,000 metric tons; last week’s came in at 354,000 metric tons.

 

Technicals:  Kansas City wheat went and filled the gap yesterday which helped support the Chicago contract, however, Chicago wheat still needs to close that gap at 467.  These 467 marks will be a big pivot point for us as we go into the weekend.  A breakout above resistance 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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