May Contracts Anticipate WASDE Report

April 8, 2020 09:59 AM
Neutral/bullish bias for 3 grains contracts
Thursday is last trading day for this week
Grain futures market update

Grain futures market update


Corn Futures (May)

Fundamentals: May corn futures managed to grind higher yesterday in what was the first positive session since March 26. Tomorrow’s U.S.D.A. report is expected to show U.S. ending stocks near 2.004 billion bushels. World ending stocks estimates come in near 298.50 million tonnes.

Technicals: Though the chart and fundamentals remain suspect at best, we continue to believe there is an opportunity for a tradable short-term bottom. What does this mean? It means if you have shorts on, maybe you reduce or cover your upside risk for the time being. If you have no position, the risk is well defined at these levels. Yesterday’s session was constructive, and we could see that continue through today, but the bulls MUST defend 330-332 on a closing basis. If they can achieve this, we could see a bigger relief rally in the very near term. 

Bias: Neutral/Bullish

Previous Session Bias: Neutral

Resistance: 343 ¼-344 ¾**, 354-356 ¾***

Pivot: 330-332

Support: 325**, 313 ¾-315 ¼***


Soybeans (May)

Fundamentals: May soybeans fluttered around yesterday as we continue to consolidate ahead of tomorrow’s WASDE report. Estimates for U.S. ending stocks come in near 430 million bushels. Estimates for world ending stocks come in near 101.10 million tonnes. 

Technicals: The market is at a pivotal spot, no doubt. 854-585 ¾ has been a significant level in our reports for weeks and it is proving to be so over the last four sessions. If the bulls can defend this pocket with conviction, there is room for this market to retrace the breakdown point from last week, taking us back into the mid 880’s. A failure to defend this pivot pocket and a break below Monday’s lows opens the door for a retest of contract lows from March 16's 821. 

Bias: Neutral/Bullish

Previous Session Bias: Neutral

Resistance: 871 ¼-875**, 888 ½-889 ¾***

Pivot: 854-858 ¾

Support: 842-845 ¼***, 820-821**


Chicago Wheat (May)

Fundamentals: Chicago wheat futures are in consolidation mode as we head into tomorrow’s WASDE report, also the last trading day of the week. Estimates for U.S. ending stocks come in near 940 million bushels. Estimates for World ending stocks come in near 287.37 million tonnes.

Technicals: May wheat futures remain trapped between two very important technical levels, support from 540 ½-542 ½ and resistance from 564-568 ½. The support and resistance pockets are very significant, and a breakout or breakdown will set the tone for the intermediate term. If the bulls can chew through resistance, we could see a run at the psychologically significant $6.00 handle, in short order. If support gives way, we would expect to see a drop into the mid 520’s, the breakout point from March 19 along with the 200 day moving average and 50% retracement.

Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

Resistance: 564-568 ½****, 590 ¾***, 600-603 ¼**

Support: 540 ½-542 ½****, 525-258 ¼****

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