Consolidation As Traders Focus On Upcoming USDA Report

Traders Focus On Upcoming USDA Report
Concerns regarding Corn and Soybean production remain
Funds were estimated sellers of 7,000 Corn futures contracts
Grain futures market update

Grain futures market update

Corn Futures (December)

Yesterday’s Close: December corn futures finished yesterday’s session down 2 ¼ cents, trading in a range of 7 ¼ cents. Funds were estimated sellers of 7,000 contracts.

Fundamentals: The market chopped around yesterday as market participants wait for new news to hit the wires, Monday’s USDA report being the big-ticket item. Another thing to keep on the radar is the USD, it rallied nearly every day in the back half of July but has retreated sharply for a week. Below are estimates for Monday’s USDA report, from Reuters.

 

Planted Acres: Range 83.494-89.8, Average 87.998

Harvested Acres: Range 76.114-81.9, Average 80.05

Yield: Range 161.0-167.2, Average 164.9

Production: Range 12.723-13.55, Average 13.193

 

Technicals: Prices were little changed and remained range-bound in yesterday’s trade, keeping may of our technical and resistance pockets in place for today’s session. 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/Bullish

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 1 ¾ cents, trading in a range of 8 cents. Funds were estimated sellers of 3,500 contracts.

Fundamentals: The market seems to be in consolidation mode now that tariff talk is behind us and focus is put back on the upcoming USDA report, out Monday at 11am CST. Below estimates from Reuters.

 

Planted Acres: Range 78.0-83.5, Average 81.006

Harvested Acres: Range 77.3-82.8, Average 79.89

Yield: Range 46.0-49.0, Average 47.6

Production: Range 3.633-3.974, Average 3.800

 

Technicals: The market has been consolidating for the last 48 hours, digesting headline risk, then refocusing on the USDA report. We tested and held technical support late last week and again on Monday. From the risk/reward side of things, this is the spot for bears to reduce shorts and bulls to consider buying. If we break and close below Monday’s lows (perhaps a place for a stop-loss), we could see the selling accelerate.

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 875**, 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 down 9 ½ cents, trading in a range of 13 cents. Funds were estimated sellers of 5,500 contracts.

Fundamentals: Wheat futures gave up gains yesterday on the back of technical selling. There has been a lack of new news which has kept the technicals intact, we anticipate this to continue into Monday’s USDA report. We are watching the US Dollar closely, we have come off the highs over the last week, if that continues, we could see it put some wind in the sails of wheat futures.

Technicals: On the technical side of things, not much has changed. 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. Significant support comes in from 471 ¾-473 ¾, a break and close below here could accelerate things.

Bias: Neutral/Bearish

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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