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Daily Grain Market Update (5.16.18)


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CORN (July)

Yesterdays Close:July futures finished the day up 5 cents, this after trading in a range of 6 cents. Funds were estimated to have been buyers of 12,500 contracts.

Fundamentals: Continued talk of a struggling crop in Brazil helped offer support to the market, but we feel that there is more going on behind the curtains. We continue to believe that demand will be a big factor in helping corn continue the rally. Talks of planting delays in some areas may also be offering some support to the market. We will get updated ethanol data in this mornings weekly EIA report; that is due out at 9:30 am cst. Tomorrow morning, we will get the weekly export sales numbers from the USDA which will be released at 7:30am cst. Outside of these few tidbits, weather will be the key catalyst as the crop continues to get in the ground and starts to develop.

Technicals: The bulls managed to achieve a conviction close above our pivot point which we listed in yesterdays report as 397 . This strong close open the door for a run at the top end of the range which comes in from 407-408 . If the bulls can achieve a strong close above this pocket, it opens the door for a bigger move higher. If the bears defend the top end of the range, we could see some liquidation from the funds who have established a healthy net long position. First support going forward comes in from 394 -397 . This pocket contains the 50-day moving average, recent lows, and a key retracement from the years range. A break and close below will neutralize our bullish bias.

Bias: Bullish

Resistance: 407-408 ***, 425 -426 **

Support: 394 -397 ***, 390 **, 379 -383 ****

SOYBEANS (July)

Yesterdays Close: July futures finished the day down 1 cents, this after trading in a range of 20 cents. Funds were estimated to have been net sellers of 1,500 contracts.

Fundamentals:Soybean futures saw a choppy trade yesterday, thanks to some mixed signals in the soybean meal market. NOPA crush numbers were out yesterday for the month of April, bean crushings came in at 161.016 million bushels, this is historically high and 16% over last years level. April soybean meal stocks came in at 946,291 metric tons. Weather will be an important catalyst in the intermediate term but will have a more significant impact going out into the next few months. Chinas Vice Minister is in Washington to discuss trade with the administration, that has not been much news from this, but we would expect to hear something within the next 24-48 hours.

Technicals:Soybean futures posted an inside day yesterday (trading within the previous days range). Key technical resistance remains intact from 1026 -1028 which will keep the bears in control until the market achieves a conviction close above here. On the support side of things, the first pocket we have our eye on comes in from 1001 -1005 , but the more significant pocket and our target comes in below that at 988 -994 . This pocket represents a key retracement along with the lows from the original tariff talk scare on April 4th.

Bias: Bearish

Resistance: 1026 -1028 ***, 1040-1042 **

Pivot: 1016

Support: 1001 -1005 **, 988 -994 ****, 965 -969 ***

WHEAT (July)

Yesterdays Close:July wheat futures finished the session up 3 cents, this after trading in a range of 10 cents. Funds were estimated to have been sellers of 2,500 contracts.

Fundamentals:Wheat futures have been trending lower for the better part of the last two weeks but were able to get a relief rally in yesterdays session. There has not been a lot of new news on the wires which continues to give the technical traders an advantage for the time being. Weekly export data from the USDA will be released tomorrow morning at 7:30, perhaps this will give market participants something to talk about.

Technicals:Yesterdays relief rally is spilling over into some momentum this morning, but we dont expect much to come of it. The bears have been and continue to be in control of this market. Technical resistance this morning comes in from 499-502 , only a close above this level will start to neutralize the chart. On the support side of things, the objective remains 477 -482 . This pocket represents a key retracement on the years range, along with the 100 and 200 day moving average.

Bias: Bearish

Resistance: 499-502 ***, 523-524**, 543 -545***

Support: 477 -482 ****, 467 **, 458 -463***

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Oliver Sloup is Vice President of Blue Line Futures, a leading futures and commodities brokerage firm located at the Chicago Board of Trade. Blue Line Futures mission is to put the customer first, and that means bringing YOU the best customer service, consistent and reliable research and state of the art technology.  Oliver has been a guest on CNBC and Bloomberg, among others.  Oliver has over a decade of trading experience. Prior to Blue Line Futures, Oliver worked as the Director of Managed Futures at iiTRADER.

 

 

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