Weather, Demand, and WASDE

Grain futures market update

Grain futures market update

Corn 

Corn futures finished last week by putting in new contract lows at $3.20, closing the week at $3.21. Technically speaking, there’s still no sign of a low. With weather remaining bearish — especially with Iowa and Illinois getting rains this week — we expect the trend to remain sideways to lower until there is a fundamental reason for a bounce. As with most grains this week, I wouldn’t expect anything major heading into the August 12 USDA WASDE report. There’s still a gap above at $3.40+, but this seems less likely to get filled in the near term. The main story this week will remain weather, demand, and the WASDE report.

Source: RJO Futures Pro

Soybeans 

Last week we finally saw the November soybeans contract break out below the upward trend they were stuck in for quite some time. There isn’t much to say besides the fact that we are going to get a large crop and it will take some serious uptick in demand for that to be neutralized, but until then, beware of more downside. The market is sitting around the 100-day moving average, which may provide temporary support, but something will need to change fundamentally for this to begin moving higher again. The headline this morning is soybean sales announced to China. Keep your eye on Wednesday’s WASDE report for new direction in the market, this may give us a bounce today, or at least limit downside heading into August 12.

Source: RJO Futures Pro

If you are interested in discussing the potential opportunities in grains, contact Tony directly at tcholly@rjofutures.com.

About the Author

Tony Cholly is a senior market strategist at RJO Futures. Tony's primary focus is on technical analysis in the grain, metals, and energy markets.