Grains Bloodbath | Can Markets Stabilize?
Fundamentals: Corn futures were locked limit pretty much all day, was there that big of a change over the weekend? We think not, but we also think the market may have gotten ahead of itself following last week’s USDA report. It is very evident that money flow (largely from computers/algos) is dominating the market and adding to the large daily swings. Yesterday’s crop progress report showed good/excellent conditions at 64%, in line with expectations and unchanged from last week. This is 7% below last year’s rating.
Technicals: With the limited trade yesterday, there is not a lot of new information we can add today. In yesterday’s report we talked about a break below the 560-area opening the door for a retracement back into “the mid 520’s”. This represents trendline support and the 100-day moving average. We like being buyers on the first test, but do not confuse that with an overly bullish stance. There have been and will likely continue to be great trading opportunities for participants on both sides.
Previous Session Bias: Neutral
Resistance: 573 ¼-575****, 588 ½-591 ¼***
Pivot: 552 ¼
Support: 523 ¾-528 ¼****, 514 ¼**
Fundamentals: Soybeans got hit hard yesterday and we are not going to try to pin a fundamental explanation as to why we were nearly $1.00 lower. Yesterday’s crop progress report showed good/excellent conditions at 59%, this was 1% below expectations and last week’s reading. This is 12% lower than last year’s rating.
Techncials: Yesterday we talked about first support at 1370, with little support below that until 1325-1330, which the market blew right past. The 100-day moving average was tested and held. First support this morning comes in from 1300 ½-1306 ¾. Below that is the low from last Wednesday, 1291 ½.
Previous Session Bias: Neutral/Bullish
Resistance: 1346**, 1365-1376***, 1414 ¾-1423**,
Support: 1300 ½-1306 ¾***, 1291 ½**
Chicago Wheat (September)
Technicals: Chicago wheat futures broke lower along with corn and beans yesterday, marking their lowest price in three months. Our bias for wheat continues to be the most bearish of the three as the chart continues to breakdown. If the Bulls cannot fill and stabilize above yesterday’s gap, we could see a continuation towards the psychologically significant $6.00 handle.
Previous Session Bias: Bearish/Neutral
Resistance: 648 ¼-651 ¼***, 664**, 672-676 ½**
Call/Text/Email, Oliver with any questions.
Oliver@BlueLineFutures.com and 312-837-3938
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