Blue Line Express

Grain Market Update (3.14.18)

CORN (May)

 

Yesterday’s Close:  Corn finished yesterdays session up 1 ¾ cents, trading in a range of 5 ½ on the day.  Funds were estimated buyers of 11,000 contracts.

Fundamentals:  Not much new news on the wire in the last 24 hours which has kept prices tethered to important technical levels.  South American weather continues to be a headline, but we are starting to turn our attention to developments in the states as we inch towards planting season.  Prospective plantings will be at the end of the month, that will set the tone for things going forward.  We will keep an eye on soybeans and wheat as they could have some spillover implications on price in the near term.  Export sales will be out tomorrow morning, we will have those figures in tomorrow’s report.

 

Technicals:  The market looked like it was in a position to make a run straight towards $4 yesterday but lost momentum on spill over pressure from the wheat market as we approached the afternoon.  The manage held on to gains to close positive, settling right in the middle of our resistance pocket from 391 ¼-393 ¾.  If the bulls can achieve a close above resistance today, we would expect to see momentum buyers step in and elevate prices towards 400 ¾-406.  The RSI (relative strength index) is at 71 which is technically overbought so additional consolidation before the next move is very much possible.  The bulls do not want to see a close back below 387, this would likely encourage long liquidation.

 

Bias: Neutral/Bullish

 

Resistance: 391 ¼-393 ¾***, 400 ¾-406****, 417 ¼-421 ½**

Support:  387***, 379 ½-382 ¾****, 376-376 ½**, 370 ¼-372 ¼***

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SOYBEANS (May)

 

Yesterday’s Close:  May soybeans finished the day up 6 ¾ cents, trading in a range of 10 ¾ cents for the day.  Funds were estimated buyers of 9,000 contracts on the session.

 

Fundamentals:  Weather continues to be a headline story, mostly due to the fact that there is not much else to report on at this point.  There are chances for rain in Argentina later in the week, but we are in the camp that thinks it may be too little to late.  Market participants will start turning their focus towards the Prospective Plantings report on March 29th and weather in the states over the coming weeks, the jawboning could help keep a bid in the market in the short term.  Export sales will be out tomorrow, along with NOPA crush which is released at 11am cst.

 

Technicals:  The market is working hard to recover loses from Fridays dramatic sell off.  1055-1059 was first support on the way down and will now act as first resistance.  We feel this represents good selling opportunity on the first test.  A failure at this pocket we believe would encourage long liquidation back down towards support with 1027-1030 being the first target.  If the bulls are able to chew through this pocket on a closing basis that will change the tide an could lend hand to a run back above 1080.  The RSI (relative strength index) is currently at 56.50 which is near the neutral mark.

 

Bias: Neutral/Bearish

 

Resistance: 1055-1059 ¾***, 1070 ¼**, 1080-1082 ½****

Support: 1027-1030****, 1013 ¾-1016**, 1001-1006***

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WHEAT (May)

 

Yesterday’s Close:  May wheat futures finished yesterdays session down 5 cents, trading in a range of 13 ¼ cents for the day.  Funds were estimated sellers of 4,000 contracts on the session. 

 

Fundamentals: Prices were marching higher on the back of the poor crop ratings report Monday afternoon but turned midday to finish the day positive.  Better chances for rain have worked their way into the forecast which led to the pressure.  If these rains are realized, we could see the market continue to slide.  If the rains miss, then we expect to see prices get back above the $5 handle in relatively short order.  Needless to say, we are in a weather market so some of the other fundamentals and technicals have less significance than usual.

 

Technicals:  The market is testing support again which is not what the bulls want to see.  We liked buying support on the FIRST test, a revisit is not welcomed.  We often compare price and technicals to a wrecking ball and a building, the more a level is tested, the weaker it becomes making it more susceptible to breaking down with each blow.  If the market does break down below we would look for the market to test 464 ½-467 ¾.  This pocket represents a key Fibonacci retracement level, previously important price points, and the 50-day moving average.

 

Bias: Neutral

 

Resistance: 494-495**, 516 ¾-518 ½***, 535-538 ¾**

Support: 478-481 ½***,464 ½-467 ¾**, 451-455 ½****

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