Is China in the Market for Corn?

April 24, 2020 09:47 AM
Corn futures market looking for confirmation on China rumor
Soybean futures relief rally may be running out of steam
No news is bad news for Wheat futures market
Grain futures market update


Corn (May)

Fundamentals: Rumors have been swirling that China was in the market for some big corn purchases. That, coupled with today’s option expiration has provided support in prices over the last few sessions. Right now, it looks like the market is wanting to see confirmation of those rumors before getting too excited. Export sales yesterday morning came in at 726,700 metric tons, down 20% from last week and 49% from the 4-week average. May options expire at the close today, if you have May Corn futures you will want to consider rolling.

Technicals: Tuesday’s reversal off the lows sparked additional sort covering yesterday, leading to strength in the last 2 sessions. 313 ¾-315 ¼ is our pivot pocket, if the bulls can defend this we could see additional buying take us into the low 330s, an area we have talked about being a potential magnet as we head into option expiration today. We will be shifting our focus to July futures, starting Monday.

Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

Resistance: 330-332****, 343 ¼-344 ¾**

Pivot: 313 ¾-315 ¼

Support: 298 ¾-301 ¼**


Soybeans (May)

Fundamentals: Soybean futures saw a surge higher yesterday but closed off those highs, signaling that the relief rally may be running out of steam without any new friendly news headlines. Export sales yesterday morning came in at 344,900 metric tons, this is 41% higher than last week’s data, but still poor and 48% below the 4-week average.

Technicals: Soybeans accelerated higher early yesterday but failed to sustain that momentum through the day session, taking prices back near our pivot pocket, 842-845 ¼. If the bulls fail to achieve a strong close above here, we could see sellers re-enter at these higher prices. Resistance out above our pivot pocket comes in from 854-858 ¾. 

Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

Resistance: 854-858 ¾****, 871 ¼-875**

Pivot: 842-845 ¼

Support: 820-821***, 808 ¼***, 791**


Chicago Wheat (May)

Fundamentals: Wheat futures are in consolidation mode as market participants continue to wait for new news to give the market a new direction. We tend to think that no news is bad news for prices and could spur some selling. Export sales yesterday morning came in at 244,700 metric tons, up 37% from last week but 22% below the 4-week average.

Technicals: In our reports this week we have talked about our expectation for the market to chop and consolidate within the mid 540 area, this is what we have seen over the past several sessions. There are a lot of indicators near here and a lot of previous interaction between buyers and sellers. In yesterday’s report we talked about buying or selling the low/top end of the recent range, but as price action developed, we started to lean on the sell side of the July Wheat futures contract for an intermediate-term position. 

Bias: Neutral/Bearish

Previous Session Bias: Neutral

Resistance: 564-568 ½****, 587-590 ¾****

Pivot: 540 ½-542 ½

Support: 525-258 ¼****, 506 ¼-512 ¼***, 491 ¾****

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