A role reversal this morning with soybeans seeing pressure while corn and wheat attempt to find their footing. With little new news expected, technicals will be in the driver’s seat into the weekend.
Corn
Technicals (May)
May corn futures officially fizzled out against our pivot pocket from 440-442 which may have led to some technical selling in yesterday’s trade which has brought prices back down to our 4-star support pocket from 431 1/2-433 1/4 (previously significant resistance). From a risk reward perspective, we like leaning on this pocket as a buying opportunity. A break and close below would neutralize that setup. Aside from a technical pressure, there may have been some other fundamental factors at play including a private customer survey that showed corn acres over 93 million. Though it’s very early in the year, scattered showers across Iowa may have added a headwind as well. Weather will only become increasingly important from here on out to the summer.
Bias: Bullish
Resistance: 447 1/2-450****
Pivot: 440-442
Support: 431 1/2-433 1/4*, 421-422
Fundamental Notes
- Yesterday’s weekly export sales report showed net sales of 1,283,400 MT for 2023/2024 were up 16 percent from the previous week and 19 percent from the prior 4-week average. Expectations ranged from 800,000-1,400,000 metric tons. Find the breakdown of the export data here: Weekly Export Sales Summary – Blue Line Ag Hedge
There was a flash sale reported yesterday morning: Private exporters reported sales of 100,000 metric tons of corn (3,936,825 bushels) for delivery to Mexico during the 2023/2024 marketing year.
It’s estimated that 36% of corn country is experiencing drought. This is not us calling for a repeat of 2012, this is us just sharing the weekly updates. Weekly Drought Monitor Update – Blue Line Ag Hedge
Seasonal Tendencies & Fund Positioning
Seasonal Tendencies & Fund Positioning Update: Corn – Blue Line Ag Hedge
Soybeans
Technicals (May)
May soybean futures traded out above the technically and psychologically significant $12.00 level in yesterday’s trade which opened the door for a run at the upper end of our next resistance pocket at 1216. Prices stalled out about a 1 1/2 cents above that and reversed to finish lower on the day. That bearish reversal has led to some overnight weakness, but all in all, no serious damage was done and after a nearly $1 rally from the low to high, we view the price action as healthy. Bulls will want to defend our pivot pocket in the mid 1180’s, but more importantly would be support from 1171-1175.
Bias: Neutral/Bullish
Resistance: 1198-1205 1/2, 1212 3/4-1216
Pivot: 1184-1188
Support: 1171-1175**, 1125-1130
Fundamental Notes
Yesterday’s weekly export sales report showed net sales of 376,000 MT for 2023/2024 were down 39 percent from the previous week, but up 55 percent from the prior 4-week average. Expectations ranged from 250,000-800,000 metric tons. Find the breakdown of the export data here: Weekly Export Sales Summary – Blue Line Ag Hedge
It’s estimated that 33% of soybean area in the US is experiencing drought. This is not us calling for a repeat of 2012, this is us just sharing the weekly updates as weather will become a bigger point of interest for the market as we get into the springtime. Weekly Drought Monitor Update – Blue Line Ag Hedge.
Seasonal Tendencies & Fund Positioning
We took a deeper dive into seasonal tendencies and Fund positioning for soybeans in a weekend article we titled: The Big Short – Blue Line Ag Hedge
Wheat
Technicals (May)
May Chicago wheat was the leader to the downside in yesterday’s trade but is attempting to stabilize in the overnight and early morning trade. Support and resistance levels remain intact from yesterday’s trade, the big hurdle for the Bulls to overcome comes in from 550-555.
Bias: Neutral
Resistance: 563-570, 595 3/4-600, 608 1/2-611**
Pivot: 550-555
Support: 525**
Fundamental Notes
Yesterday’s weekly export sales report showed net sales of 83,800 metric MT for 2023/2024–a marketing-year low–were down 69 percent from the previous week and 71 percent from the prior 4-week average. Expectations ranged from -200,000 to 550,000 metric tons. Find the breakdown of the export data here: Weekly Export Sales Summary – Blue Line Ag Hedge
Seasonal Tendencies and Fund Positioning
We took a closer look at shorter and longer term seasonal trends for Chicago wheat futures as well as examined the Fund positioning of Funds. Check it out by clicking the link below: A Closer Look at the Wheat Market – Blue Line Ag Hedge