Fundamentals: Corn futures gaped higher Sunday night but failed to find any follow through on Monday, which has led to selling pressure in the overnight and early morning trade. Yesterday’s Crop Progress report showed good/excellent conditions at 71%, 1% below expectations, and a 2% drop from last week. The Commitment of Traders report showed funds bought back roughly 75,000 contracts from June 23rd to June 30th, shrinking their net short position to just over 200,000 contracts. Forecasts look hot and dry for some areas, but as mentioned in previous reports and in our interview with RFD-TV yesterday, it is July. The USDA will release their monthly report on Friday, covering crop production and WASDE (world agricultural supply and demand estimates); we will have estimates out by the middle of the week.
Technicals: In yesterday’s report and interview with RFD-TV, we noted we were being more active on the sell-side to start the week as the market appeared to have moved too far too fast. The market has pulled back to first support 346-349 ½, if you had reduced last week, this would be a spot to consider getting some exposure back on. A break and close below here could lead to another leg lower and start to neutralize the recent bullish developments.
Bias: Neutral Previous Session Bias: Neutral
Resistance: 360-363 ½**, 370-374**** Support: 346-349 ½****, 338 ¼-339*** Soybeans (November)
Fundamentals: New crop soybean futures sprang higher on Sunday night but failed to get follow-through during normal trading hours, not a great sign for the Bull camp, in the near term. Hot and dry has been the headline that has helped prices reach multi-month highs but looking past a headline and realizing it is July in the Midwest has put a limit on the premium. Yesterday’s Crop Progress report showed good/excellent conditions at 71%, unchanged from last week and in line with most estimates. The Commitment of Traders report showed funds bought roughly 23,000 contracts from June 23rd-June 30th, expanding their net long position to nearly 68,000 contracts. The USDA will release their monthly report on Friday, covering crop production and WASDE (world agricultural supply and demand estimates); we will have estimates out by the middle of the week.
Technicals: In yesterday’s report we talked about the market potentially running out of steam with RSI being at the highest level since the market peaked in January, coupled with the 200-day moving average at 913. The market has now retreated to first support (previously resistance), which comes in from 900-904 ¼. The Bulls want to see this area defended, a failure to do so would Neutralize our bias (currently, cautiously optimistic) and could take us back towards 880.
Bias: Neutral/Bullish Previous Session Bias: Neutral/Bullish
Resistance: 913 ½**, 923-927 ¼**** Support: 900-904 ¼****, 877 ½-882 ¼** Chicago Wheat (September)
Fundamentals: Wheat futures managed to stabilize after being under pressure early in yesterday’s session. The market is lingering near unchanged this morning, following yesterday’s weekly reports. Crop Progress showed winter wheat conditions at 51% good/excellent, a 1% decline from last week. Spring wheat conditions came in at 70% good/excellent, a 5% drop from last week but slightly better than expectations. The weekly Commitment of Traders report showed funds bought back roughly 10,000 contracts from June 23rd-June 30th, shrinking their net short position to 39,000(ish).
Technicals: The market is trying to carve out a near term low as prices linger in between significant support and resistance levels. Our bias is Neutral, but consecutive closes above 497-502 ¼ could start to turn the tide, in favor of the bull camp. A break below 481-485 ½ could open the door for new contract lows.
Bias: Neutral Previous Session Bias: Neutral
Resistance: 497-502 ¼****, 517 ½*** Support: 481-485 ½***, 471-475****
Reach out to learn more about our new Ag Trade Alerts program and how we are positioned ahead of tomorrow's USDA report!
Call/Text/Email, Oliver with any questions.
Oliver@BlueLineFutures.com and 312-837-3938 Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.