Fundamentals: Corn futures drifted lower yesterday on what appeared to be mostly technical selling, but rumors surfaced later (because hindsight is always 20/20) that the drop in some commodity prices could have been tied to a highly leveraged fund blowing up, Archegos Capital Management. It is being reported that this was several billion dollars in losses across a wide variety of markets. All eyes are on today’s USDA report, out at 11:00 AM CT (estimates in table above).
Technicals: Corn futures continued their descent yesterday, taking prices into technical support from 536-540. This is the low end of the recent range, and until support is broken, the market is still rangebound which keeps our near-term bias at Neutral. Today’s USDA report has the potential to give this market a new direction, other than sideways.
Previous Session Bias: Neutral
Resistance: 556 ¼-559 ¼****, 570 ¾-575*, 600*
Support: 536-540***, 517 ¾-523 ¼***
Fundamentals: We were expecting grain markets to relatively mute ahead of the report, but that was not the case. As mentioned in the corn section above, there was a big drop in several commodity prices that could have been tied to a highly leveraged fund blowing up, Archegos Capital Management. It is being reported that this was several billion dollars in losses across a wide variety of markets. All eyes are on today’s USDA report, out at 11:00 AM CT (estimates in table above).
Technicals: The market broke below support 1390-1400 which accelerated the selling pressure. Previous support now becomes resistance, the Bull camp needs to reclaim ground above this pocket to repair the technical damage that was done over the last week. A failure to do so could extend the liquidation and drop us into our next support pocket, 1333 ½-1335 ½.
Previous Session Bias: Neutral
Resistance: 1434 ½-1436 ½***, 1442-1445 ¾*, 1460*
Support: 1364 ¼-1364 ¾**, 1333 ½-1335 ½***
Chicago Wheat (May)
Technicals: Chicago wheat futures made new lows for the move yesterday and have come within a tick of they psychologically significant $6.00 handle. A break and close below here could accelerate the selling (despite being 90 cents off the highs already), the next support pocket does not come in until 569-572 ¾.
Previous Session Bias: Neutral/Bearish
Resistance: 626-631 ½***, 644 ½-649 ½***
Pivot: 607 ¼-610 ½
Support: 596 ½-600**, 569-572 ¾.
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