Grain futures prices were strong in Mondays trade but have failed to find follow through and have fizzled out in the overnight trade.
In Case you missed it…
Oliver Sloup, Vice President and Co-Founder of Blue Line Futures was on RFD-TV yesterday morning sharing his thoughts on the grain and livestock markets with Scott the Cow Guy.
Corn
Technicals (May)
May corn futures tagged the 20-day moving average yesterday for the first time since December. Despite the initial failure and weaker prices in the early morning trade, the market is still knocking on the door of breaking out above it. Our first resistance pocket remains intact for today’s trade, we see that coming in from 429 1/2-433 1/4. If the Bulls can chew through and close above this pocket, we could see an extension towards 440. On the flipside, the Bulls want to defend our pivot pocket from 421-422 to keep the newfound momentum in their favor.
Bias: Neutral/Bullish
Resistance: 429 1/2-433 1/4, 440-441
Pivot: 421-422
Support: 415-416*, 398-402
Fundamental Notes
Corn inspections totaled 1.08 million metric tons, 35% higher for the current marketing year versus last year, totaling 20.63 million tons.
USDA will release their monthly report on Friday, we hope to have estimates out by tomorrow. This will be the big-ticket item of the week but the quarterly stocks and prospective plantings report at the end of the month will be what most traders, hedgers, and analysts are looking forward to this month.
Seasonal Tendencies
(updated on Mondays)
Below is a look at historical seasonal 5, 10, 15, 20, and 30 year averages for May corn futures (updated each Monday) VS today’s prices (black line). Seasonally we see that corn has shown the ability to chop around in a mostly sideways trade from the first half of March up into the back half of April.
*Past performance is not necessarily indicative of futures results.
Below is a look at the last 5-years for May corn, which shows the three most recent years were able to stabilize and firm into April, while 2019 and 2020 prices continued to trickle lower during the same time frame.
Fund Positioning
(updated on Mondays)
Friday’s Commitment of Traders report showed Funds were net buyers of 45,475 futures and options contracts, broken down we see that 35,441 of that was short covering and 10,034 was new longs. That shrinks their net short position to 295,258 contracts, still one of the largest net short positions on record.
Soybeans
Technicals (May)
May soybean futures made a strong effort to breakout above trendline resistance, trading out above it in the early trade but ultimately fizzling out to finish near the lower end of the day’s range. That reversal lower has led to some weakness in the overnight and early morning trade as prices are trading back below yesterday’s low. If the Bulls can muster up the strength to get back out above trendline resistance, we could see it help gravitate prices towards the 20-day moving average which is continuing to work lower each day. We have not seen May soybeans trade on the 20-day moving average since November.
Bias: Neutral/Bullish
Resistance: 1163-1168, 1184*, 1198-1205 1/2
Pivot:
Support: 1125-1130**
Fundamental Notes
Soybean inspections totaled 1.02 million tons, 20% lower for the current marketing year versus last year.
USDA will release their monthly report on Friday, we hope to have estimates out by tomorrow. Perhaps now that harvest continues to move along in Brazil the USDA could make more meaningful cuts to Brazilian production to narrow the gap with many private analyst estimates.
Seasonal Tendencies
Seasonal tendencies have been out the window to start the year, so I’m not sure how much weight one puts into them at this juncture, but seasonally we tend to see some consolidation and strength from the middle of March to the middle of April.
*Past performance is not necessarily indicative of futures results.
MRCI shows back tested results for a bullish seasonal that starts on March 17th and goes through April 21st. They show this as bullish for 13 of the last 15 years with the average rally being about 56 cents and the average loss being about 37 cents.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed yet another week of net selling by Funds, extending their net short position to 160,653 futures and options contracts. That’s an increase of 23,975 contracts, 20,576 of which were new short positions.
Wheat
Technicals (May)
May wheat futures made new lows yesterday but were able to defend our support pocket from 550-555 as prices quickly snapped back higher and posted a decent day, eating into some of Friday’s losses. With that said, there has been a lack of follow-through in the overnight and early morning trade. First resistance for today’s trade comes in at 568 with more significant resistance points above that.
Bias: Neutral
Resistance: 573-578, 595 3/4-600, 608 1/2-611**
Pivot: 568
Support: 550-555**, 525
Fundamental Notes
Wheat inspections totaled 353,137 tons, 17% lower for the current marketing year versus last year.
Seasonal Tendencies
Below is a look at historical seasonal averages for May Chicago wheat futures VS this year’s price (black line), updated each Monday. As you can see, seasonal tendencies start to soften up in the back half of March.
*Past performance is not necessarily indicative of futures results.
Commitment of Traders Snapshot
(updated on Mondays)
Friday’s Commitment of Traders report showed little change in the Managed Money net position. Funds are seen to be net short about 56k futures/options contracts.
