Grain Markets Rally From Overnight Lows

Made You Flinch

At around 5am CT this morning, Reuters reported that “The Bank of England said on Wednesday that it would buy as many long-dated government bonds as needed between now and Oct. 14 to stabilize financial markets and added that it would postpone next week’s start of its gilt sale program.”

The question this raises in the US is “will the Federal Reserve take a pause with raising rates?”. If so, the thought is that it would near term bullish for risk assets.

Quarterly Stocks Report

The USDA will release quarterly stocks data on Friday, 11am CT. The average analyst estimates are as follows: Corn, 1.512 billion bushels; Soybeans, .242 billion bushels; Wheat 1.776 billion bushels.

Argentina “Soy Dollar”

For the month of September, Argentinian farmers have been offered a favorable exchange rate in an effort to entice producer selling (we’ve written about this previously). There is no indication that the program will extend into October. If it doesn’t it may slow the pace of their selling and bring some demand back to the U.S.

Corn

Corn futures have been trading along the downward sloping 100-day moving average for the last two sessions and again today. So far, the market is holding. If the Bulls can defend support through today’s session, it is possible we see some relief come into the market ahead of Friday’s quarterly stocks report. First resistance comes in from 678-682.

Bias: Neutral/Bearish

Previous Session Bias: Neutral/Bearish

Resistance: 678-682***, 698-700**, 725 3/4-728 1/4****

Support: 665-668 1/2***, 647 1/4-650 1/4****

Soybeans

Soybean futures attempted to rally yesterday but couldn’t hold the early morning gains through the session. The reversal is lead to additional pressure overnight and a breakdown below support from 1407-1415 3/4. If the Bulls cannot defend this pocket through today’s session, a retest of the low end of the range could be in order, that comes in near 1375.

Bias: Neutral/Bearish

Previous Session Bias: Neutral/Bearish

Resistance: 1446 1/4-1450 1/2***, 1500-1507 ¾***

Pivot: 1407 1/2-1415 3/4

Support: 1373-1376***, 1345-1355****

Wheat

Chicago wheat futures are carving out higher lows on the back of higher highs, keeping the recent bull trend intact. As mentioned in previous reports, our bias remains neutral. The chart looks extremely constructive, but the fundamentals are sketchy at best. With that said, there will probably be some decent short-term opportunities for participants on both sides of the trade.

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 909-915***, 940-950***

Pivot: 859 1/4-863 3/4

Support: 839-849****, 816 1/2-819 1/4***

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