Happy Friday Grain Traders - All Attention On Monday’s USDA Report

Traders Focus On Upcoming USDA Report
Concerns regarding Corn and Soybean production remain
Grain Traders pare risk before USDA report
Grain futures market update

Grain futures market update

Corn Futures (December)

Yesterday’s Close: December corn futures finished yesterday’s session up 4 cents, trading in a range of 6 ¾ cents. Funds were estimated buyers of 11,000 contracts.

Fundamentals: Export sales yesterday morning came in at 239,500 metric tons, below the low end of expectations. The weather has turned hot and dry for some areas (Surprise, it’s August), causing some concern for late-planted corn, there’s a lot of it. Estimates for Monday’s USDA report have been rolling out and that has helped put some premium in the markets this week. Below is estimated from Reuters.

 

Planted Acres: Range 83.494-89.8, Average 87.998

Harvested Acres: Range 76.114-81.9, Average 80.05

Yield: Range 161.0-167.2, Average 164.9

Production: Range 12.723-13.55, Average 13.193

 

Technicals: The market has been drifting higher this week as anticipation for a bullish USDA report builds. That has brought the market up to our resistance pocket of 418 ¼-420 ¾. If you recall, this was the inflection point from a week and a half ago that led to a breakdown below $4.00. Consecutive closes above here could warrant another leg higher. A failure and we could see prices back below $4.00 soon. For clients who are looking to hedge or have long positions from lower prices, this is not a bad spot to reduce risk.

Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

Resistance: 418 ¼-420 ¾***, 431 ¼-432 ¾**, 447-450***

Support: 405 ½-409 ¼***, 395-397 ¼**, 376 ½-380****

 

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Soybeans Futures (November)

Yesterday’s Close: November soybean futures finished yesterday’s session up 16 ¾ cents, trading in a range of 19 ¾ cents. Funds were estimated buyers of 7,500 contracts.

Fundamentals: Export sales came in at 419,800 metric tons, within the range of expectations. The market has had everything except the kitchen sink thrown at it with regards to trade; perhaps all the bad news is priced in? It appears the black-swan trade is that there is a deal done before the election. Don’t confuse a black-swan trade with a trade recommendation. Attention will now turn towards Monday’s USDA report, then back to weather and crop development.

Planted Acres: Range 78.0-83.5, Average 81.006

Harvested Acres: Range 77.3-82.8, Average 79.89

Yield: Range 46.0-49.0, Average 47.6

Production: Range 3.633-3.974, Average 3.800

 

Technicals: The market chewed through first resistance yesterday, bringing prices to our next pocket, 889 ½-891 ¾. As mentioned in our interview with RFD-TV yesterday, we would not be surprised to see the momentum take us closer to $9.00 ahead of Monday’s USDA report. Though the rally is nice to see, this is still just a relief rally. The trend of lower lows and lower highs remains intact. Significant resistance comes in from 900-904 ½. From the technical perspective, this is a spot for bulls to consider reducing long positions and shorts/hedgers to consider selling.

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 889 ½-891 ¾**, 900-904 ¼***, 921-924***

Support: 875-880***, 854 ½-860 ½****, 839 ¾-843 ¾**

Wheat Futures (September)

Yesterday’s Close: September wheat futures finished yesterday’s session up 8 ¾ cents, trading in a range of 16 ¾ cents. Funds were estimated buyers of 6,500 contracts.

Fundamentals: Wheat was the beneficiary of higher grain prices in yesterday’s session as traders look to square up positions ahead of Monday’s USDA report. Export sales yesterday morning helped provide momentum too, that came in at 487,700 metric tons, near the top end of expectations.

Technicals: September wheat futures have come off of technical support well over the last two sessions, marking a higher low this week. Perhaps the trend of lower highs and lower lows is coming to an end, next week will be pivotal from the technical side of things. Our first resistance in yesterday’s report remains intact, that comes in from 507 ¼-509 ½. A move above here could warrant another leg higher.

Bias: Neutral/Bearish

Previous Session Bias: Neutral/Bearish

Resistance: 507 ¼-509 ½****, 525 ¾-531 ½****

Support: 471 ¾-473 ¾***, 444½-446**, 427 ¼****

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