Corn Futures (May)
Fundamentals: Attention is all on this morning’s USDA report, out at 11 am CT. Prospective acres are expected to come in near 94 million. Quarterly stocks are expected to come in near 8.134 billion bushels. Past this report, the market faces headwinds, primarily around diminished demand from ethanol plants across the Midwest shutting down. How much of that is priced into the market? Probably a fair amount. Imagine where corn would be if we hadn’t gotten the rally in soybeans and wheat.
Technicals: Market sentiment has been growing overwhelmingly bearish, which is the bull camps silver lining. Once we get passed today’s USDA report, what more bad news are they going to throw at the market? Does that mean the bottom is in? No, but it does mean we wouldn’t be surprised to see a relief rally in the coming days, despite all the fundamental headwinds. First resistance comes in from 354-356 ¾. If the bulls were able to chew through this pocket, we could see an extension towards 363 ½-365 ¾. This would be a spot where we’d look at selling more aggressively. This pocket represents previous support and the eventual breakdown point from March 16th.
Fundamentals: Weekly export inspections came in at 414tmt, towards the low end of estimates. Estimates for prospective acres comes in from 82-88 million acres, the average estimate at 85. Quarterly stocks are expected to come in near 2.228 billion bushels.
Technicals: The recent consolidation, following last Monday’s big move higher could set up for a bull flag and another leg higher. 899 ½-902 ¼ is not only a psychologically significant level, but also technically as it represents the 50% retracement from the October highs to the recent lows. If you have been able to ride the wave higher, this would be a spot to consider reducing exposure. We would look for a pullback as a buying opportunity. Previous resistance now becomes support, we see that as 854-858 ¾. We would buy that pullback on the first test.
Previous Session Bias: Neutral/Bullish
Resistance: 888 ½-889 ¾***, 899 ½-902 ¼***, 915-920****
Support: 854-858 ¾***, 842-845 ¼***, 820-821**
Chicago Wheat (May)
Fundamentals: Yesterday’s weekly export inspections came in at 364tmt, towards the low end of expectations. Traders are expecting today’s Prospective Plantings report to show all wheat acres at 45 million. Estimates for quarterly stocks come in from 1.385-1.575 billion bushels, the average estimate being near 1.430 bb.
Technicals: The market could not gather its footing yesterday which led to a choppy trade as participants looked to square up positions ahead of today’s USDA report. Thought the chart remains constructive, we wouldn’t be opposed to selling on a failure against the January highs, that would cement a near term double top. On the flip side, we would buy a pullback into the 540’s. Our bias remains Neutral.