Grain futures have traded on both sides of unchanged in the overnight and early morning session. With WASDE and CONAB behind us attention will shift to the technical landscape as well as the BIG reports at the end of the month.
Get all of our daily fundamental and technical research, alerts, recommendations, and more delivered to your inbox and phone!
Sign Up Now!
Corn
Technicals (May)
Corn futures are chewing through first resistance near 440 which has opened to the door a grind higher into our 4-star pocket from 447 1/2-450. We would not be terribly surprised to see the market attempt to catch its breath near this pocket. If you’re a producer who just a few weeks ago was wishing to get back to 450 to make some sales, opportunity is knocking. Options can be a great tool to use if you’re wanting to keep the upside open, because if we can chew through 4-star resistance it could spark a bigger short covering rally with the next pocket coming in closer to 460-465.
Bias: Bullish/Neutral
Resistance: 447 1/2-450****
Pivot: 440-442
Support: 431 1/2-433 1/4****, 421-422***
Fundamental Notes
- CONAB estimates Brazilian corn production at 112,753mmt, down from 113,696 last month and like soybeans, well below the USDA estimate, which is at 124.00.
- The agency cited an overall fall in the sowing area for the Brazilian corn, especially for second-corn’s planted area, which is expected to fall by around 8% this year. Second corn, which is planted after soybeans are harvested in the same areas, is presently being sowed. Conab expects second-corn production to reach 87.349 million tons this year, 14.7% lower than last season and smaller than the 88 million tons predicted last month. -Reuters
- Weather in Brazil will continue to be monitored closely as their second crop develops. Weather will also become growingly important here in the states as we move into spring. As it stands right now, Iowa will be a focal point as drought conditions persist.
Seasonal Tendencies & Fund Positioning
Seasonal Tendencies & Fund Positioning Update: Corn – Blue Line Ag Hedge
Soybeans
Technicals (May)
May soybean futures were able to springboard higher yesterday, coming within a stone’s throw of our resistance pocket from 1198-1205 1/2. The market has failed to find follow-through in the early morning trade, but the short-term trend looks friendly. If the Bulls can clear that resistance pocket, it could spur another round of short covering with little in the way until you get roughly 20 and 40 cents higher. On the support side of things, 1171-1175 is the pocket the Bulls need to defend to keep the ball rolling in their direction.
Bias: Neutral/Bullish
Resistance: 1198-1205 1/2***, 1212 3/4-1216***
Pivot: 1184
Support: 1171-1175***, 1125-1130**
Fundamental Notes
- CONAB estimates Brazilian soybean production at 146,859 mmt, down from 149,404 in last month’s report and well below the USDA’s 155mmt.
- Conab said soy yields were well below expectations in the center west due to unfavorable weather conditions in the beginning of the soybean cycle. -Reuters
Seasonal Tendencies & Fund Positioning
We took a deeper dive into seasonal tendencies and Fund positioning for soybeans in a weekend article we titled: The Big Short – Blue Line Ag Hedge
Wheat
Technicals (May)
May Chicago wheat futures traded on both sides of unchanged in yesterday’s trade as prices flutter around near our pivot pocket from 550-555. If the Bulls can close above our pivot pocket, we could see further relief take prices back to retest the 20-day moving average and trendline resistance from 563-570. A failure to close out above this pocket keeps the Bears in full control of the technical landscape.
Bias: Neutral/Bullish
Resistance: 563-570***, 595 3/4-600***, 608 1/2-611**
Pivot: 550-555
Support: 525**
Fundamental Notes
- The biggest news for wheat yesterday was the fact that there wasn’t another export cancelation.
Seasonal Tendencies and Fund Positioning
We took a closer look at shorter and longer term seasonal trends for Chicago wheat futures as well as examined the Fund positioning of Funds. Check it out by clicking the link below:
A Closer Look at the Wheat Market – Blue Line Ag Hedge
Leave a Reply