Corn Futures (July)
Yesterday’s Close: July corn futures finished yesterday’s session down 8 ¼ cents, trading in a range of 13 ½ cents. Funds were estimated sellers of 26,000 contracts.
Fundamentals: Profit taking, and position squaring continues as we inch closer to the end of the week and July option expiration. Export sales this morning came in at 38,400 metric tons of old crop and 360,800 metric tons of new crop. Weather will remain a driving catalyst, the next week and a half continues to look wet which could extend delays and raise more concerns regarding yields, for what has been planted. We will get an acreage update from the USDA next Friday; we will have estimates out beforehand.
Technicals: The market has retreated into our technical support pocket and is threatening to break down below. We still believe that this is a buying opportunity on the first test, but the bulls need to not only see it hold, but see it spring off of support. If we see prices linger, we could see a further breakdown. Due to the velocity of the move higher over the last month and a half, another 20-cent pullback would still keep the uptrend intact. Our bias is back to outright Bullish, from Bullish/Neutral yesterday.
Resistance: 464 ¼**, 475***
Support: 436 1/2**, 423 ½-424 ¾**
Soybeans Futures (July)
Yesterday’s Close: July soybean futures finished yesterday’s session down 9 ½ cents, trading in a range of 12 cents. Funds were estimated sellers of 10,500 contracts.
Fundamentals: The market pulled back on a round of profit taking and position squaring ahead of the weekend and Friday’s option expiration (July options). Export sales this morning came in at 571,500 metric tons of old crop and 200,000 metric tons of new crop. We remain friendly on prices and view pullbacks as buying opportunities. The talk about prevent plant has started to shift from corn to beans and we expect to see that continue if weather confirms forecasts over the next two weeks. Another silver lining (though slim) is the fact that President Trump will be meeting with China’s President Xi at the G-20 summit next week, a meeting that was previously taken off the table following a failure to find a trade agreement. We will get an acreage update from the USDA next Friday; we will have estimates out beforehand.
Technicals: The market failed against our 4-star resistance from 920 ¼-925 ¾ and has since retreated to test (and so far, hold) our 4-star technical support, which we have had outlined as 895 ¾-900. This pocket represents the gap from Friday’s close, the 100-day moving average, and the psychologically significant 900 handle. That equates to 918 ½-924 ¾ for the November contract. If you reduced against resistance and continue to have a bullish bias, this is an excellent spot to get some exposure back on. Our bias is back to outright bullish, from Bullish/Neutral yesterday.
Resistance: 920 ¼-925 ¾****
Support:895 ¾-900****, 883 ¼**, 866-872 ¼***
Wheat Futures (July)
Yesterday’s Close: July wheat futures finished yesterday’s session down 9 ½ cents, trading in a range of 16 ¾ cents. Funds were estimated sellers of 7,000 contracts on the day.
Fundamentals: Export sales this morning came in at 187,600 metric tons. In yesterday’s morning report we moved our bias to neutral as fundamentals and technicals softened up, we have moved that back to Neutral/Bullish this morning. Prices are now at support and if you’re bullish the market, there’s a good risk/reward opportunity here.
Technicals: Our 4-star support is being tested in the early morning hours, a must hold pocket for the bulls. A break and close below opens the door for an extension lower, back towards the psychologically significant $5.00 handle. On the resistance side of things, the bulls want to achieve consecutive closes back above 529-530 ¾.
Resistance: 529-530 ¾**, 542 ½-550***, 563 ½-566 ¾***
Support: 514 ¼-518 ¾****, 495-500***