Fundamentals: Corn futures are starting the week on firm footing as market participants try to assess the implications of the cooler weather over the weekend (which was to be expected). The weekly Crop Progress report will be released after the close, expectations are for corn to be 71% planted, well ahead of the 5-year average pace, 56%. Friday’s Commitment of Traders report showed funds are short roughly 190,000 contracts, an aggressive position for this time of year. If we start to see a shift in news/sentiment, we could see that spark a short covering rally. We will have estimates for tomorrow’s USDA report out later today.
Technical Outlook: Corn futures rallied right into the middle of our first resistance pocket, we have had that defined as 320-325. Though we are optimistic on prices over the intermediate term, this was a spot for us to reduce exposure with clients. A bull back to our pivot pocket 316-317 ¾ would be an opportunity to re-enter long positions. Consecutive closes above our resistance pockets could spark a bigger relief rally.
Previous Session Bias: Bullish/Neutral
Resistance: 320-325***, 330-333****, 343 ¼-344 ¾**
Pivot: 316-317 ¾
Support: 308 ¼-310*** 298 ¾-301 ¼**
Fundamentals: Cooler weather and concerns of frost damage in some areas over the weekend has offered minor support to the market to start the week. Keep in mind that some of these concerns were being priced into the market on Thursday and Friday, a classic buy the rumor sell the news event. Crop progress will be released after the close, expectations are for the U.S. soybean crop to be nearly 40% planted, well above the 5-year average, 23%. We will have estimates for tomorrow’s USDA report out later today.
Technicals: The market tested and held our pivot pocket multiple times in the first half of the week, ultimately leading to a springboard reaction higher to round out the week. The market came within a stone’s throw of our 4-star resistance pocket, we have had that defined as 857-861¼. In Friday’s report we wrote: “If you had bought support earlier this week, you may consider reducing against resistance ahead of the weekend.” We remain cautiously optimistic, with a slightly bullish tilt in our bias, but would rather wait for a pullback than buy at the top end of the range.
Previous Session Bias: Neutral/Bullish
Resistance: 857-861 ¼****, 871 ¼-875**
Support: 818-821***, 808 ¼***, 791**
Chicago Wheat (July)
Fundamentals: Wheat futures opened higher to start the week but are treading near unchanged at the early morning intermission. We will have estimates for tomorrow’s USDA report out later today. Friday’s Commitment of Traders report showed funds are long 3,840 contracts.
Technicals: The market opened Sunday night with some strength, taking us back to our 4-star resistance pocket, 525-529. If you want to be short and reduced against technical support last week, this is the spot to consider re-entering short positions.
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*