Grain Market Update (5.25.18)
May 25, 2018
Yesterday’s Close: Corn futures finished the session down 4 ¼ cents, this after trading in a range of 8 ½ cents. Funds were estimated to have been sellers of 13,000 contracts.
Fundamentals: July corn futures posted their highest price since last fall but producer selling and long liquidation from the funds reversed the course of the thin overnight/early morning market. Export sales yesterday came in at 1,127,728 metric tons. The break down was 854,300 metric tons of old crop and 273,400 metric tons of new crop. Weather for some of the bigger producing areas has been friendly recently which may keep a lid on the recent rally. If weather starts to turn hotter and drier, perhaps we start to hear more talks of potential drought. It is option expiration for June options so that may keep things in check into the long weekend.
Technicals: Yesterday’s reversal is technically bearish, but the overnight and early morning trade is not getting the follow through selling. With that said, the overnight/earl morning should be taken with a grain of salt as we look for volume to confirm price (something the overnight/early morning trade lacks). If we start to see additional pressure on the floor open, we could start to see it feed on itself. Over the intermediate term we remain optimistic on prices, but a pull back would be healthy and is welcomed by many. Significant technical support 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.
Yesterday’s Close: Soybean futures finished the session down 3 ¼ cents, this after trading in a range of 15 ¼ cents. Funds were estimated sellers of 4,000 contracts.
Fundamentals: Soybeans started yesterday on solid footing but gave up ground on the back of long liquidation. There seem to be some concerns that the US/China trade talk may be an over promise under deliver scenario, this after talks with US/North Korea broke down. We believe China is a key player in these peace talks and this may throw a wrench into things in the near term. Commerce Secretary Wilbur Ross will be in China next week, so it is likely we here more details soon. Export sales came in at -139,500 metric tons for 2017/2018 and 6,900 metric tons for 2018/2019. The USDA did announce a flash sale of 264,000 metric tons to “unknown” for 2018/2019. It is option expiration for June options so that may keep things in check into the long weekend.
Techncials: The market had been on a tear all week, but yesterday’s price action resembled what some technicians would refer to as a “gravestone doji”. As you can probably infer by the name, it is not a bullish indicator. The market finished the day right near our pivot point which we had listed as 1037 3/4, that remains intact. First technical support 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.
Yesterday’s Close: July wheat futures finished the day down 1 cent, this after trading in a range of 16 cents. Funds were estimated buyers of 1,000 contracts.
Fundamentals: Hot and dry weather had led to an early morning bid in the market but that dissipated in the afternoon as forecasts showed better chances for moisture in some key areas. Yesterday’s export sales came in at 112,300 metric tons for 2017/2018 and 340,000 metric tons for 2018/2019. We are continuing to keep a close eye on the Kansas City futures board as it will likely continue to be a leader. We will also be watching corn and beans closely as the grains will likely feed on each other’s strength or weakness in the near term. It is option expiration for June options so that may keep things in check into the long weekend.
Technicals: As with soybeans, yesterday’s wheat price action left what is referred to as a “gravestone doji”; spoiler alert, this is looked at as bearish. The formation doesn’t mean the market needs to sell off the next day but is more or less a caution sign of the near future. Technical resistance remains intact from 543 ½-545. This represents a key retracement from the highs of last July to the December lows; it was also previous resistance and the original breakout point on June 30th last year. If the bears can defend this pocket on a closing basis, the risk....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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