Daily Grain Marketing Update
Fundamentals: Analysts and traders are keeping a close eye on the ever-changing and conflicting forecasts; this will likely keep volatility elevated and give nimble participants plenty of opportunities to capitalize on both sides of the market. Friday’s WASDE report will likely be less exciting than the quarterly report, there have only been 4 times in the last 20 years that we have seen yield changes. Ending stocks are expected to come in near 2.683 billion bushels. Export sales this morning came in at 599,200 metric tons, 66% higher than last week, and 30% above the 4-week average.
Techncials: In the past two Grain Express reports we talked about 4-star support from 346-349 ½, being a significant support pocket and “a spot to look at buying”. In yesterday’s Tech Talk we talked about the Bulls having the advantage until we see a breakdown below this pocket. We have noted our first resistance pocket from 360-363 ½. A breakout above this pocket could spark another wave of short-covering, but if you had bought support yesterday, you may want to consider reducing some of that exposure/risk ahead of tomorrow’s USDA report.
Previous Session Bias: Neutral/Bullish
Resistance: 360-363 ½**, 370-374****
Support: 346-349 ½****, 338 ¼-339***
Fundamentals: The market retreated yesterday which has spilled into early morning weakness. Attention is on the weather, and there are conflicting forecasts. We have been urging people to take hot and dry forecasts with a grain of salt, it is normal to have that weather in the Midwest during the month of July. Friday’s WASDE report is expected to show ending stocks at 414 million bushels. A change in yield is not expected, we have only seen that 3 times in the last 20 years. Export sales came in at 952,200 metric tons, 60% higher than the 4-week average.
Technicals: The market seems to be holding ground near our pivot pocket, 900-904 ¼, a positive sign for the Bull camp. Resistance remains intact at 913 ½. A breakout above this level could encourage a move towards 923-927 ¼, a key retracement along with previously important price points. Significant support remains intact, 877 ½-882 ¼.
Previous Session Bias: Neutral/Bullish
Resistance: 913 ½**, 923-927 ¼****
Pivot: 900-904 ¼
Support: 877 ½-882 ¼****
Chicago Wheat (September)
Technicals: The market broke out above 4-star resistance which led to a wave of short-covering, taking us to our next resistance level, 517 ½ (the highs of the day). In our Tech Talks over the past two days, we have talked about the potential for a short-covering rally towards 525-530, the market traded up to 525 ¾ in the early morning hours. If you have been long on the breakout, this is the area to reduce. If you want to be short, this is an area to consider selling against.
Previous Session Bias: Neutral
Resistance: 525-530***, 546 ¼**
Pivot: 517 ½
Support: 497-502 ¼****, 481-485 ½***
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Oliver@BlueLineFutures.com and 312-837-3938
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