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Grain Market Update (4.9.18)

Published on: 13:02PM Apr 09, 2018

CORN (May)

 

Last Week’s Close:  May corn futures traded in a 20 ½ cent range for the week, only to finish up 1 cent at Friday’s close.  Friday’s Commitment of Traders report showed that funds bought 29,406 futures, this puts their net long position at 138,245 futures.  Keep in mind that this data is for March 27th-April 3rd.

 

Fundamentals:  Last week’s trade/tariff headlines led to a volatile week as market participants tried to digest just what the rhetoric means.  We believe that it is just jawboning for the time being as these retaliatory tariffs would not be in place until the end of t he year.  Soybeans would be the market where we would see the most damage, but that could spill over into the other grain markets including corn.  If these headlines calm down, expect to see and hear more with regards to weather in the states as we head into planting season.  Cold wet weather has some looking at delays already which could start to shift some acres around.  We do have a WASDE report out tomorrow, we will have estimates available in tomorrow’s Grain Express.

 

Technicals: Despite last weeks bearish headlines, the market held extremely well with prices finishing the week near unchanged.  We continue to be friendly the market, but we will want to see a close out above technical resistance to get a little more excited.  That pocket continues to come in from 391 ¾-395 ¼.  Tis pocket represents the 50% retracement from the July highs to the January lows, along with recent highs. A close above here would mark higher highs after higher lows and opens the door to an extension above....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

SOYBEANS (May)

 

Last Week’s Close:  May soybeans traded down 9 ¾ cents for the week, this after trading in a monstrous 77 cent range.  Friday’s Commitment of Traders report showed that funds sold 582 contracts, shrinking their net long position to 172,429 contracts.  Keep in mind that this data is for March 27th-April 3rd.

 

Fundamentals:  Retaliatory tariffs from China had the grain markets in a tizzy last week with the biggest concern being on soybeans.  Last week we expressed the notion that China may not be able to afford to buy our beans.  South American bean prices got a nice boost last week on the idea that they will be the once filling the void (partially).  We had been less optimistic on bean prices for other reasons outside of China but mentioned last week that the headlines were a gift and we would recommend tightening things up and moving to the sidelines.  We do have a WASDE report tomorrow, we will have estimates in tomorrow’s report. 

 

Technicals:  The market traded in a very wide range last week which presented a heck of a lot of opportunities for both the bulls and the bears.  The market has opened higher in the Sunday night trade as fears subside about tariffs, this has prices right back to where the were previously.  With wider ranges, some of our support and resistance pockets are a little wider to start the week.  First technical resistance comes in from 1052 ¾-1060 ½.  If the bulls cannot chew through this pocket, we would expect to see some long liquidation.  A breakout above sends prices to....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

WHEAT (May)

 

Last Week’s Close:  May wheat futures defied gravity and traded 21 cents higher for the week, this after trading in a range of 27 cents.  Friday’s Commitment of Traders report showed that funds bought back 6,144 futures, this expands their net short to 71,963 futures.  Keep in mind that this data is for March 27th-April 3rd.

 

Fundamentals:  Wheat futures staged an extraordinary performance last week despite the significant weakness in corn and beans.  Concerns over weather conditions helped offer premium into the weekend and that has carried over into momentum in the overnight/early morning trade.  We do have a WASDE report tomorrow morning which may have some influence on near term price action.  We will have estimates for that in tomorrow’s report.

 

Technicals:  Wheat futures were easily the most constructive of the grains last week.  We had been on the bearish side of things but the ability to hold ground amidst the headline headwinds led us to flip our bias to the bullish side of things.  The market went and filled the gap from March 16th and continued to work higher.  We are treading with the 200-day moving average in the early morning trade, a close above this level could encourage additional short covering towards 494 ¾.  A failure to get momentum on the floor open could lead us back to fill the gap and test support 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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