Buy the Dip, Sell the Rip?

Export Inspections

Yesterday’s weekly export inspections were in line with expectations.

• Corn: 31,698,015 bushels
• Soybeans: 24,602,332 bushels
• Wheat: 12,325,453 bushels

Crop Progress

• Good/Excellent ratings for winter wheat were reported at 27%, a record low for this time of year. Poor/Very Poor ratings were reported for 37% of the crop, the second worst on record, only 1996 was worse, coming in at 41% Poor/Very Poor.
• 3% of the U.S. corn crop is planted, up 1% from last week.

WASDE Report

Today’s USDA/WASDE report will be out at 11am CT. Below are the estimates for US Ending Stocks (in billions of bushels).

• Corn: 1.319
• Soybeans: .198
• Wheat: .574

South American Production Estimates

• Argentina Corn: 37.12, down from 40.0 in March
• Argentina Soybeans: 29.30, down from 33.0 in March
• Brazil Corn: 126.08, Up from 125.0 in March
• Brazil Soybeans: 153.64, up from 153.0 in March

Outside Markets

• Equity markets are firm in the early morning trade, crude oil is trading near unchanged at $79.66, and the US Dollar is little changed at 101.75.

Corn

Seasonal Trend in Play

• The next corn seasonal starts on April 30th and is for the September contract.

Technicals (May)

• May corn futures hit our 3-star technical support pocket to a T yesterday, marking a low of 640 1/4. In yesterday’s report we talked about this presenting an opportunity for Bulls and Bears, stating: “In our opinion, this would be a spot for bears to consider reducing exposure, and Bulls to consider building exposure as the risk range is fairly well defined.”. The market has was able to defend that support which helped prices stage an impressive rally. Prices have rallied as much as 17 cents off support, taking prices into our pivot pocket this morning, which we’ve outlined as 654-659. As with yesterday, we view this is an opportunity for Bulls an Bears, especially ahead of a USDA report. If you had used support as a buying opportunity, this is a spot to consider reducing or hedging that exposure. If you had reduced short positions and remain bearish, this is a spot to consider getting that exposure back on.

Bias: Neutral

Previous Session Bias: Bearish/Neutral

Resistance: 676**, 682 1/2-686****

Pivot: 654-659

Support: 636 3/4 -640 1/4***, 620-622**

Soybeans

Seasonal Trend in Play

• July soybeans have trended higher from March 19th-April 30th for 13 of the last 15 years.
• May soybean futures have trended higher from April 7th to April 21st for 12 of the last 15 years.

Technicals (May)

• May soybean futures continue to linger in our pivot pocket, which we’ve outlined as 1490-1500. We see fairly equal risks on both sides of the market from these levels, which has our bias at Neutral ahead of today’s report. Managed Money is holding a fairly large (but not out of this world) net long position, which raises the concern of long liquidation if we get a bearish report and the technical give way.

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 1528 3/4-1538 1/2****, 1549 3/4***

Pivot: 1490-1500

Support: 1472-1476****, 1456-1462***, 1437 1/2-1440***

Wheat

Seasonal Trend in Play

• None

Technicals (May)

• Wheat futures are trickling lower this morning, approaching the low end of the recent risk range. We remain optimistic that we can see higher prices, as mentioned in previous reports, options are a great way to gain market exposure to play for a counter trend move.

Bias: Bullish/Neutral

Previous Session Bias: Bullish/Neutral

Resistance: 712-715***, 730-735***, 746 3/4-758 3/4****

Pivot: 690-700

Support: 650-660***