Fundamentals: May corn futures manage to rally yesterday, we are attributing that to end of the month position squaring and the May contract going into delivery, something we expected and wrote about in the previous reports this week. We believe the fundamental headwinds will keep a lid on upside mobility in the near term and would be looking to be short over the weekend. It is officially “weather season” and that means you can start to expect gaps on the Sunday night open, higher or lower. With the current forecast, fundamental landscape, and bearish chart, we would lean towards the short side.
Technicals: Yesterday we suggested that there could be a short term tradable low and “if you’ve been short you may consider reducing with the idea of reentering before the weekend”. The market came close to Monday’s highs but fell short in closing the gap from the previous week. If we were to get a bump back up there today, we would look at selling the rally
Previous Session Bias: Neutral
Resistance: 320-325***, 330-333****, 343 ¼-344 ¾**
Pivot: 316-317 ¾
Support: 308 ¼-310*** 298 ¾-301 ¼**
Fundamentals: July soybeans caught a bid yesterday as rumors circulated that China was in the market for 4-8 cargoes of beans, later confirmed by Reuters they purchased at least 300,000 metric tons. That momentum failed to carryover into the overnight session, likely because in a press conference yesterday, President Trump brought up Tariffs on China as a tool for reparations from Coronavirus.
Technicals: After defending our pivot pocket in the previous two sessions, the market found a reason to rally. The market is now flirting with the April 23rd highs and our resistance pocket, 857-861 ¼. Consecutive closes above here would neutralize the bearish technical landscape, potentially leading to another leg higher for prices. A failure to breakout keeps the prospects of new contract lows on the table.
Previous Session Bias: Neutral
Resistance: 857-861 ¼****, 871 ¼-875**
Support: 818-821***, 808 ¼***, 791**
Chicago Wheat (July)
Fundamentals: Chicago wheat made new lows then recovered into the afternoon session on end of the month position squaring and spillover strength from corn and beans. Export sales yesterday morning came in at 467,400 metric tons, up 91% from last week, and up noticeably from the 4-week average.
Technicals: The market tested and held our 3-star support pocket perfectly 506 ¼-512 ¼. In yesterday’s report we wrote: “ If you have been short the market for the last week, this is the spot to consider reducing. We are still Bearish the market but wouldn’t be surprised to see some near-term relief.”
Previous Session Bias: Bearish/Neutral
Resistance: 538-540 ½**, 552-554 ¾***, 562-565½****
Support: 506 ¼-512 ¼***, 491 ¾-494 ¼****
Feel free to call/text/email, Oliver with any questions. Oliver@BlueLineFutures.com and 312-837-3938
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