Daily Grain Express (7.6.22)

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Corn

Seasonal Trends in Play: Short September corn from 6/13-7/27. This has been profitable for 13 of the last 15 years with the average gain being roughly 33 cents, or $1,650 per one 5,000-bushel contract.

Fundamentals: Yesterday's weekly Crop Progress report showed good/excellent conditions at 64%, this is a 3% drop from last week and 1% lower than expectations. Compared to last year, that number is unchanged. 7% of the crop is silking. Weekly export inspections came in at 676,824 metric tons, well below the range of estimates.

Technicals: Corn futures broke below support which opened the door for a precipitous drop, filling the gap from February 7th and coming within a stone's through of previously significant resistance from November to February. Despite the extreme volatility, all the technicals remain intact as our first support pocket held on a closing basis yesterday. As mentioned in yesterday's Tech Talk, this is a great risk/reward setup for those that want to be long the market. If you had been playing the seasonal bearish trend, this is the spot to consider reducing that exposure. The chart is a technical graveyard but is ripe for a decent relief rally.
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Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bearish

Resistance: 645-652 ½****, 678 ¼-684 ½**, 697-701****

Pivot: 624-630

Support: 586-589 ¼****, 574 ¼-579 ¼***

Soybeans

Seasonal Trends in Play: Short November soybeans from 7/1-8/31. This has been profitable for 13 of the last 15 years with the average gain being roughly 40 cents, or $2,000 per one 5,000-bushel contract.

Fundamentals: Yesterday's weekly Crop Progress report showed good/excellent conditions at 63%, this is a 2% drop from last week and 1% lower than expectations. Compared to last year, that number is 4% better. 3% of the crop is setting pods and 16% is blooming. Weekly export inspections came in at 354,987 metric tons, below the range of estimates.

Technicals: Soybeans got taken to the woodshed yesterday, breaking below the 200-day moving average and the 50% retracement. That forms a pocket form 1452-1457. If the Bulls can chive a close back above this pocket, we could see an attempt at filling the gap from yesterday's open, that comes in from 1495-1505. A failure to close back of this pocket could keep the selling pressure on. There's been significant technical damage done over the last few weeks, so a rally would likely just be relief in a downward trending market. Our bias remains in bearish territory, despite the high probability of a decent relief rally.
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Bias: Neutral/Bearish

Previous Session Bias: Neutral/Bearish

Resistance: 1495-1505****, 1560-1566***, 1592-1597***

Pivot: 1452-1457

Support: 1413 3/4-1424 1/4***, 1400-1403****

Wheat

Fundamentals: Yesterday's crop progress report showed spring wheat ratings at 66% good/excellent, 7% better than estimates. Winter wheat is 54% harvested, a hair behind expectations. Yesterday's weekly export inspections came in at 111,830 metric tons, well below the range of estimates.

Technicals: Our bias has been in bearish territory for a while now, but the market retreated back to some significant levels. Previous resistance in December and February from 800-815, was the breakout point on February 22nd. The full retracement in our eyes represents a short-term opportunity for relief in what is also a deeply oversold market. The chart still looks ugly as sin, but as with corn, there's a good risk/reward trade to the buyside at these levels, whether that be short covering or initiating a new position. We are moving our bias out of bearish territory to outright Neutral.
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Bias: Neutral

Previous Session Bias: Neutral/Bearish

Resistance: 898 ½-903****, 960-970***

Pivot: 839-849

Support: 800-815****, 739-749***

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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.