Corn Futures (December)
Fundamentals: December corn futures finished yesterday’s session up 5 ¾ cents, trading in a range of 9 ½ cents. The inability to take out contract lows with conviction coupled with concern over cooler temperatures and possibly an early frost led to moderate short covering from funds. The next two sessions will be pivotal in setting the tone for the start of September. The other sliver of good news was in yesterday’s weekly EIA ethanol report, showing production increased (finally) 15,000 barrels per day. Weekly export sales this morning came in at 856,400 metric tons.
Technicals: Yesterday’s low came within a ½ of a cent from contract lows, springboarding from that point into the afternoon session. The price action was the most encouraging we’ve seen in several weeks, but we need to see follow-through to round out the week. First resistance remains intact at 381, a conviction close above here opens the door for a run at the gap from August 13th, 392 ¾. We are moving our bias to outright Bullish, a failure to find follow-through will neutralize that.
Previous Session Bias: Neutral/Bullish
Resistance: 381**, 392 ¾***, 405-407**
Support: 363 ¾-369***, 338 ¾-343**
Soybeans Futures (November)
Fundamentals: Soybeans started yesterday’s session lower but managed to reverse on the back of cooler weather forecasts, raising concerns over an early frost. The bulls need to see these cooler forecasts extend, if we turn back warm, we would expect pressure to come back into the market. Jawboning between U.S. and Chinese trade delegates has turned “softer” but there’s still not much positive news to report on that front. Weekly export sales this morning came in at 448,300 metric tons.
Technicals: Soybeans tripped stops below our support at 854 ½ but failed to breakdown with conviction below that, leading to a relief rally in the afternoon session. The springboard off of technical support was exactly what the bulls needed, leading us to change our bias from outright Neutral to Bullish/Neutral. A failure to feed off of the positive momentum over the next two-sessions will put our bias back to Neutral.
Previous Session Bias: Neutral
Resistance: 880-882**, 891 ½-896 ¾***, 921-924***
Support: 852 ½-856 ½****, 839 ¾-843 ¾**, 815 ½****
Wheat Futures (September)
Fundamentals: December Chicago wheat managed to reverse off yesterday’s early morning lows with conviction, thanks to some spillover strength in the corn and soybean market. If broad-based money flow starts to shift in the grain space, we would expect to see that help wheat work higher too. With that said, we think there is better value in the KC contract. Weekly export sales this morning came in at 661,700 metric tons.
Technicals: Yesterday’s reversal off the lows was encouraging, but the bulls need to see follow-through to round out the week. Resistance remains intact at 483 ½, consecutive closes above here opens the door for a potential short-covering rally towards $5.00. A failure to take out resistance keeps the bears in control.
Previous Session Bias: Neutral
Resistance: 483 ½**, 493-500****, 525 ¾-531 ½****
Support: 461 ¾-466***, 442-446**, 427 ¼****