Fundamentals: It's the Start of Planting Season

April 14, 2020 09:59 AM
Corn and soybean weekly export inspections came within range of expectations
Continued weakness is in the livestock complex has created concerns regarding feed needs
Grain futures market update

Grain futures market update

Corn (May)

Fundamentals: Export inspections came in at 1.03 million metric tons, within the range of expectations. Yesterday was the first planting progress report of the year, showing corn 3% planted. As tractors start rolling and crops get put in the ground, weather will become increasingly important in the coming weeks.

Technicals: Over the last 4 sessions, corn has closed between 330 ½-332 ½, each session. This area was listed as our pivot-pocket prior to the stalemate, it was an important interaction point between the bulls/bears as it marked previous contract lows. Consecutive closes above here could spark that short covering rally to the mid 340s. Consecutive closes below and the trend following traders will likely pounce. 325 ½ is the contract low, below there we are in uncharted territory and need to look at the continuous chart. The next support we see from using the continuous comes in from 313 ¾-315 ¼, the August 2016 lows.

Bias: Neutral

Previous Session Bias: Neutral

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

Pivot: 330-332

Support: 325**, 313 ¾-315 ¼***


Soybeans (May)

Fundamentals: Export inspections yesterday morning came in at 442,000 metric tons, within the range of expectations. Planting progress for soybeans will begin to be monitored in the coming weeks. Continued weakness is in the livestock complex has created concerns regarding feed needs, putting a bit of a wet blanket on the market.

Technicals: The market tried to suck buyers in at the top end of the range but now has them on their heels as prices retreat towards the low end of the recent range. Our pivot pocket remains intact, from 854-858 ¾ and will continue to be an inflection point. Consecutive closes above here could spark a recovery into the mid-880s, an area that represents a key retracement, moving average, and the breakdown point from April 1. If the bull camp fails to defend this pivot pocket, a retest of contract lows is not out of the question.

Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

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

Pivot: 854-858 ¾

Support: 842-845 ¼***, 820-821**


Chicago Wheat (May)

Fundamentals: Weekly export inspections came in at 609,000 metric tons, above the top end of expectations. The market worked higher Sunday night and early Monday on concerns of weather, those higher prices were sold into on the “floor open.”

Technicals: In our April 13 report we wrote: “The market is now threatening 4-star resistance, 564-568 ½. If you had bought in the mid 540s, this would be an area to consider reducing.” We have had that 4-star resistance labeled as 564-568 ½ (yesterday’s high, 564 ½). The market as retreated in the overnight/early morning trade, making another run at significant support, 540 ½-542 ½. 

Bias: Neutral

Previous Session Bias: Neutral/Bullish

Resistance: 564-568 ½****, 587-590 ¾***, 600-603 ¼**

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


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