Fundamentals: Corn futures have traded roughly 25 cents off yesterday’s low as crop conditions fall and reports of Chinese demand take hold. Yesterday’s crop progress report showed overall Good/Excellent ratings for the U.S. fell 1% to 64%, largely inline with estimates. Rumors that China was in the market for US corn yesterday have picked up steam, this has yet to be confirmed and will be interesting to see if we get a “buy the rumor, sell the news” reaction. Weather continues to be monitored very closely, hot and dry continues to be the trend for the Northern Plains.
Technicals: Significant technical support held yesterday, we had that defined as 533-536. This pocket represented a key Fibonacci retracement, the 100-day moving average, and previously important price points. In yesterday’s early morning interview with RFD-TV, we talked about the possibility of a relief rally off the 100-day moving average, for the three main grains (corn, soybeans, and wheat)Click this link to watch yesterday’s interview! 547 552 ¼ is our pivot pocket. If the Bulls can achieve a conviction close above here, we could see an extension towards the 570 area.
Previous Session Bias: Neutral/Bearish
Resistance: 569 ¼-573****, 588 ½-591 ¼***
Pivot: 547-552 ¼
Support: 533-536***, 507-514****, 500 ¼**
Fundamentals: Soybeans recovered well into yesterday afternoon, that momentum has carried into the overnight/early morning trade. Though expected, yesterday’s crop progress report offers a nice tailwind to the market too, with overall Good/Excellent conditions dropping 2%, to 58%. The real strength is likely coming on the back of rumors that China is back in the market for US grain, which has yet to be confirmed. If confirmed, it will be key to watch how the market reacts. With prices nearly 50 cents off yesterday’s low, will it be a “buy the rumor, sell the news” event? Time will tell. Weather continues to be monitored very closely, hot and dry continues to be the trend for the Northern Plains.
Techncials: Soybeans have recovered from yesterday’s pressure, after testing and holding the 100-day moving average. The relief rally has taken prices back above our pivot pocket, from 1365-1370. A close above or below here could set the tone for the back half of the trading week. Above here, the next resistance pocket is 1398-1401.
Previous Session Bias: Neutral
Resistance: 1398-1401***, 1414 ¾-1423**
Support: 1325 ¾-1333***, 1300 ½-1306 ¾***
Chicago Wheat (September)
Technicals: Chicago wheat futures tested and held the 100-day moving average perfectly yesterday, along with corn and beans. We talked about this in our interview with RFD-TV and noted that it could provide a relief rally across the board, corn, soybeans, and wheat. The market has traded back above our pivot pocket, from 672-676 ½. A close below or above this pocket could help set the tone for the remainder of this week’s trade.
Previous Session Bias: Neutral/Bearish
Resistance: 694 ¼-700***, 723 ½-725**
Pivot: 672-676 ½
Support: 666**, 648 ¼-651 ¼****
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