Grain & Cotton Express
Outside Markets: Grain futures made new lows for their respective move yesterday, on the back of the biggest down day in the Dow since 1987. That pressure carried over into the overnight session, and that has morphed into optimism as outside equity indices are limit up. Over the last 24-hours we have been talking with clients that the massive closures could be equivalent to ripping the band aid off. Stop beating around the bush and let’s get all the bad news on the table and over with. There is also news that Starbucks has reopened all of their stores in China and there is a Coronavirus test soon to be available that can show results in hours, not days. Does that mean a bottom is in? No. But it’s a step in the right direction. Right now, this is a consumer demand problem and if nothing bigger comes of it, the recovery could be sharp. The lingering concern is that it may expose deeper issues in the underlying economy.
Technicals: The market made new contract lows yesterday and again in the overnight session. Outside markets have stabilized and grains are following suit in the early morning trade. The chart remains bearish, but a lot of the near-term price action will be on the back of spillover strength/weakness from the outside market.
Previous Session Bias: Neutral
Resistance: 387-390****, 398 ¾-400***
Pivot: 373 ¼-375
Support: 363 ½ -66 ¾**, 352 ¼-355**
Technicals: Soybeans rolled over yesterday which spilled over into additional pressure last night. That pressure has turned with the turn of the outside markets and we are now 25 cents off of the overnight low. If we see this follow through on the floor open, we could see additional short covering take us to fill the gap from 888 ½-889 ¾ in the near future.
Previous Session Bias: Neutral/Bullish
Resistance: 888 ½-889 ¾***, 908 ¼-912 ½****
Technicals: May wheat futures punched below $5.00 yesterday but managed to close off the lows, helping support prices in the overnight/early morning session. The overnight price action has filled the gap from the other night, that comes in from 510 ¾-512 ¼. Though the chart is still bearish, we want to neutralize things and look for another opportunity to revisit the short side.
Previous Session Bias: Bearish/Neutral
Resistance: 523-528 ½***, 540 ½-542 ½****
Pivot: 510 ¾-512 ¼
Support: 488 ¼-494****
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