Chicago Wheat Futures Don't Have the Strength to Rally

May 6, 2020 10:35 AM
Corn futures bumping up against trendline resistance
USDA releases private export sales for corn and soybeans
Wheat futures rebound off support
Grain futures market update


Corn (July)

Fundamentals: Corn futures manage to stabilize yesterday, thanks to some help from the energy sector which saw a sharp rally in prices, leading to optimism about some ethanol plants coming back online within the next month. Will we get back to where we were before? Probably not, but anything will help. Yesterday, the USDA announced private exporter had sold 109,000 metric tons of corn to Mexico.

Technicals: The market held well yesterday and is bumping up against trendline resistance. If the market can chew through these technical levels, we believe it would spark a short covering relief rally, not to be confused with calling a bottom. With the risk defined to the downside, we like playing the long side in the near term.

Bias: Neutral

Previous Session Bias: Neutral/Bearish

Resistance: 320-325***, 330-333****, 343 ¼-344 ¾**

Pivot: 316-317 ¾

Support: 308 ¼-310*** 298 ¾-301 ¼**


Soybeans (July)

Fundamentals: The market managed to hold ground yesterday, thanks to some help from the USDA who announced export sales of 378,000 metric tons to China. 

Technicals: The market stabilized which did little to change the fundamental landscape in yesterday’s session. Our pivot pocket from 829-834 remains an inflection point. Want to be buyers have a defined risk trade down here at the low end of the range, a break and close below and it’s time to take your medicine and look for the next setup. 

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 857-861 ¼****, 871 ¼-875**

Pivot: 829-834

Support: 818-821***, 808 ¼***, 791**


Chicago Wheat (July)

Technicals: Chicago wheat futures have rebounded off support but haven’t found the strength to continue the rally to significant resistance. We continue to lean on the bearish side and believe rallies should be sold, for the time being. First resistance remains intact from 525-529. 

Bias: Neutral/Bearish

Previous Session Bias: Neutral/Bearish

Resistance: 525-529****, 538-540 ½**, 552-554 ¾***, 562-565½****

Support: 506 ¼-512 ¼***, 491 ¾-494 ¼****

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