Corn Futures (May)
Fundamentals: Corn futures caught a midday bid yesterday on the back of oil prices surging as much as 30%. President Trump tweeted that Russia and Saudi Arabia had open lines of communication regarding a production cut of 10-15 million barrels per day. The spillover enthusiasm in the corn market was short-lived, but the market is firming up this morning with headlines suggesting that OPEC+ is ready to come back to the table.
Technicals: The market tried to rally midday but fell short in holding those gains. That doesn’t bode well technically, but the market is holing ground on hopes the blood bath in the energy sector could be subsiding. We would not be surprised to see the market go on a stop hunt below the 332 lows from March 18th. Whether it rolls out of bed from there or not is a different question. We tend to believe we could see it stabilize, based on the fact that a significant amount of bad news is known to the market and there are very few (if any) bullish people left in the world. Does that mean we are bullish? No. It does mean that there may be a near term tradable bottom. We would look to reenter shorts for clients on a relief rally. First resistance comes in from 354-356 ¾.
Previous Session Bias: Neutral
Resistance: 354-356 ¾***,363 ½-365 ¾****, 373 ¼-375**
Fundamentals: Soybeans tried to stage a rally midday, along with the broader grain complex, but fell short of staging an impressive close. Yesterday’s weekly export sales came in at 957,400 metric tons, 6% higher than last week and 75% above the 4-week average.
Technicals: Soybeans managed to hold technical support yesterday, but the bounce off support was weak and lacked conviction. Our bias remains at Neutral/Bullish this morning, but if the market fails to get anything going, we will be moving it to outright Neural ahead of the weekend. A break below support could open the door for an extension towards 842-845 ¼.
Chicago Wheat (May)
Fundamentals: Export sales yesterday morning came in at 72,900 metric tons, 90% below last week and 86% below the 4-week average.
Technicals: The market broke lower yesterday, finishing the day right at our 4-star support pocket, 540 ½-542 ½. In yesterday’s report we wrote: “ If you were able to be short, this is a spot to consider reducing”. The market is recovering in the early hours, testing our pivot pocket from 550-553 ¼.
Previous Session Bias: Neutral/Bearish
Resistance: 564-568 ½****, 590 ¾***, 600-603 ¼**
Pivot: 550-553 ¼
Support: 540 ½-542 ½****, 525-258 ¼****