Traders and Farmers Focus On Crop Production Concerns

Concerns regarding Corn and Soybean production remain
Soybean Crop Progress report showed good/excellent ratings at 54%
Corn Crop Progress report showed good/excellent ratings at 57%, in line with expectations
Grain futures market update

Grain futures market update

Corn Futures (December)

Yesterday’s Close: December corn futures finished yesterday’s session up 5 ¾ cents, trading in a range of 15 ½ cents. Funds were estimated buyers of 16,000 contracts.

Fundamentals: The market was down hard before the floor open yesterday, on the back of another breakdown in trade talks. When the floor session opened, we saw willing buyers’ step into the market, (an example of why we take the overnight with a grain of salt). Concerns regarding production remain, which will keep some sort of floor in the market. Yesterday’s Crop Progress report showed good/excellent ratings at 57%, in line with expectations, down 1% from last week.

Technicals: Yesterday’s reversal of the lows was as encouraging as it gets, defending last week’s low and the psychologically significant $4.00 handle. With that said, the bulls still have some work to do. Previous support now becomes resistance, we see that as 418 ¼-420 ¾. This pocket represents the 50% retracement, the breakdown point from last week, and other previously important price points.

Bias: Neutral/Bullish

Previous Session Bias: Neutral

Resistance: 418 ¼-420 ¾***, 431 ¼-432 ¾**, 447-450***

Support: 404 ½-406 ¼**, 395-397 ¼**, 376 ½-380****

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Soybeans Futures (November)

Yesterday’s Close: November soybean futures finished yesterday’s session down 2 ¼ cents, trading in a range of 20 cents. Funds were estimated sellers of 1,000 contracts.

Fundamentals: The market reversed off yesterday’s lows as market participants weighed the recycled trade headline and potential production disruptions for this year’s crop. Yesterday’s Crop Progress report showed good/excellent ratings at 54%, in line with expectations, unchanged from last week.

Technicals: Yesterday’s drop filled the gap from May 28th, which held and then spring-boarded prices on the floor open. This is extremely encouraging price action for the near term. With that said, we still see headwinds in the market and would rather wait to work with clients to sell higher prices than try and fight the recent trend of lower highs and lower lows. There is not a lot of significant resistance until 887 ½-891 ¾.

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 887 ½-891 ¾***, 900-904 ¼***

Support: 854 ½-860 ½****, 839 ¾-843 ¾**

Wheat Futures (September)

Yesterday’s Close: September wheat futures finished yesterday’s session up 3 cents, trading in a range of 15 ¾ cents. Funds were estimated buyers of 2,000 contracts.

Fundamentals: Wheat futures traded in tandem with the broader Ag markets in yesterday’s choppy session. Yesterday’s Crop Progress report showed spring wheat conditions at 73% good/excellent, unchanged from last week, 1% below expectations. Winter wheat harvest is 82% complete, 2% behind expectations.

Technicals: The trend has been lower highs and lower lows, for that trend to remain intact the bears need to defend the resistance pocket from 507 ¼-509 ½. If the bulls are able to chew through this pocket and achieve consecutive closes above it, we could see the market run another 20 cents. The next resistance pocket comes in closer to 530.

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 507 ¼-509 ½****, 525 ¾-531 ½****

Support: 471 ¾-473 ¾***, 444½-446**, 427 ¼****

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