Grains round-up: Corn, wheat & soybean

Corn (May)

Last Week’s Close (Friday, March 9):  May corn futures were up 6 cents for the week, trading in a range of 9 ¾ cents.  Friday’s Commitment of Traders report showed funds bought 105,168 contracts through March 6th, this puts their net long at 163,614 contracts.

Fundamentals:  Corn prices gave back some gains into the weekend as traders and producers looked to capitalize on Thursday's bullish report and bullish price action.  Last week there was tariff talk that had some grain traders on their toes as President Trump imposed tariffs on steel and aluminum.  The concern would be retaliation from China targeted at soybeans, which could lead to spill overpressure into other grain markets such as corn.  Attention this week will likely turn back to weather, but we will likely start hearing more chatter with regards to the end of month Prospective Plantings report.  As private estimates come out, we could see that influence trade.

Technicals:  Corn has been in retreat mode since failing to take out Thursdays high as traders and producers look to capitalize on the big move higher over the past 2 months.  The market was in overbought territory with the RSI breaching the 80 level.  The recent pressure has brought that back down below the 70 threshold which is the “overbought” rule of thumb.  The overnight and early morning weakness needs to be confirmed by volume on the floor open.  If the sellers do step in, we could see the market work back towards....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

Soybeans (May)

Last Week’s Close:  May soybean futures finished the week down 33 ¼ cents, trading in a range of 42 ¾ cents.  Friday’s Commitment of Traders report showed that funds bought 37,985 contracts through March 6th, this puts their net long at 139,846.  Funds were estimated sellers of 19,000 soybean contracts on Friday.

Fundamentals:  The market took a hard turn on Friday as there was a seemingly delayed reaction from Thursday’s bearish USDA report.  That coupled with fears of Chinese trade retaliation opened the door for profit taking ahead of the weekend.  Last week President Trump put tariffs on steel and aluminum, if China were to retaliate soybeans would be a pressure point as they are the biggest buyer of US soybeans.  Attention and headlines will likely turn back to weather this week which is getting a little old but will need to be monitored.  We would expect private estimates to start coming out for the end of month Prospective Plantings report, this could influence price in the near term; we will start compiling those estimates and have them in reports to come. 

Technicals:  In Friday's report and in our “2 Minute Drill” on Thursday we talked about 1059 being a pivot point where we could see a 20 cent move in either direction on a breakout or breakdown.  That was triggered on Friday and led to accelerated selling into the weekend.  First support for today’s session comes in from 1027-1030, a break and close below opens the door.

Wheat (May)

Last Week’s Close:  May wheat futures finished the week down 8 ¾ cents, trading in a range of 24 ¼ cents.  Friday’s Commitment of Traders report showed funds bought back 32,960 contracts through March 6th, this puts their net short at 21,600.

Fundamentals:  Ample global supplies have offset some of the concerns surrounding the winter wheat market.  We will continue to keep an eye on the KC contract as it will likely be the driver in the short term.  Market participants will also need to keep an eye on currency fluctuations, if the dollar finds strength at these lower levels it could start to put a lid on commodities as it would likely translate into lower export demand. 

Technicals:  The market filed to get out above resistance last week which led to a breakdown below our 494 support.  Our next support pocket is being tested in the early morning trade, we have outlined this as 478-481 ½.  If you recall, this was previous resistance just a short while back, this pocket represents previously important price points as well as the 200-day moving average.  If the bulls cannot defend this pocket on a closing basis we would expect to see the market work back.