Fundamentals: Corn futures rallied hard yesterday, erasing losses from the back half of last week’s trade, that momentum has carried over into the early morning trade. This momentum comes on the back of short covering ahead of today’s USDA report, out at 11:00am CT. Keep in mind that it is also the end of the month and quarter, which could be encouraging additional position squaring. You can find the estimates at the bottom of this report. Export inspections yesterday morning came in at 1.2mmt, this was at the top end of trade estimates. There were also rumors that China was in the market for US corn, this could just be analysts looking for an after the fact reason for the pop. Yesterday’s Crop Progress report showed good/excellent conditions at 73%, 1% higher than last week and inline with expectations.
Technicals: September corn futures have clawed back some of the recent losses, taking us back to the breakdown point and our resistance pocket near 330 ½. If the Bulls can achieve a close above this pocket today, we could see additional short covering propel the market back towards the recent highs, something that seemed nearly out of the question just a few days ago. A failure at this pocket keeps the bears in control. Our bias remains Neutral ahead of today’s report.
Previous Session Bias: Neutral
Resistance: 338 ¼-339***
Pivot: 328-330 ½
Support: 314 ¼-317 ½****
Fundamentals: November soybean futures made new lows for the move yesterday but managed to finish the day near unchanged. The market is moving higher in the early morning trade as some traders see value at these prices into today’s USDA report. You can find the estimates at the bottom of this report. Export inspections yesterday morning came in at 325 tmt, nothing to write home about. Yesterday’s Crop Progress report showed good/excellent conditions at 71%, 1% higher than last week.
Techncials: Soybean futures broke below the low end of the most recent range last week, accelerating the selling pressure down to our 4-star pivot pocket which we defined as 855-860 in yesterday’s report. As mentioned in the Tech Talk video over the weekend, we believe this area represents value from a risk/reward perspective, but the Bulls must defend it on a closing basis. A failure to defend this area could open the door for another leg lower, 838-840 being the next meaningful support pocket.
Previous Session Bias: Neutral/Bullish
Resistance: 877 ½-882 ¼***, 902***
Support: 836 ¾-840 ¾****, 830-831**
Chicago Wheat (September)
Fundamentals: Chicago wheat futures snapped back yesterday, erasing much of Friday’s loss. Export inspections came in at 515tmt, within the range of expectations. Crop Progress showed winter wheat harvest is 41% complete and the crop has a good/excellent rating of 52%. Good/excellent conditions for spring wheat came in at 69%, a 6% drop from last week. Today’s USDA report will be out at 11:00am CT.
Technicals: The wheat chart has been controlled by the bears for the better part of the last 3-months, and there is nothing over the last week that has changed that. Our bias remains Neutral as we see the risk of a relief rally offsetting potential downward movement. Previous support became minor resistance at 481, this will act as a pivot pocket going forward. The more significant resistance pocket will come in from 497-502 ¼. Consecutive closes above this pocket would neutralize the technical landscape.
Previous Session Bias: Neutral
Resistance: 497-502 ¼****
Pivot: 481Support: 471-475***
The support and resistance levels are created through our systematic and proprietary technical analysis and ranked by significance from 1 to 4 stars (****). 1-2 star levels are typically best focused on intraday or early in a session to help confirm momentum. 3-4 star levels are used to define a floor or ceiling in a market, a move and close above or below could signal a breakout or breakdown.
Our bias is our outlook for the underlying market, with 7 separate rankings from outright bullish to outright bearish.
Bullish – Outright bullish
Bullish/Neutral – Bullish the market but there may be technical/fundamental headwinds around the corner
Neutral/Bullish – relatively neutral market with prices testing technical support
Neutral/Bearish – relatively neutral market with prices testing technical resistance
Bearish/Neutral- Bearish the market but there may be technical/fundamental headwinds around the corner
Bearish – Outright bearish
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