Grain markets are continuing to consolidate as it appears the market is looking for new news to give it it’s next direction.
Corn
Technicals (May)
May corn futures were able to work back higher in yesterday’s trade but failed just below our pivot pocket from 441 3/4-444 1/2, keeping it intact for today’s trade. This pocket represents the top end of the range, the breakdown point from February 14th, and now the 50-day moving average is coming into view. If the Bulls can chew through this pocket, we would think it could be technically significant enough to warrant another leg higher towards the 447 1/2-450 level.
Bias: Bullish
Resistance: 447 1/2-450****
Pivot: 441 3/4-444 1/2
Support: 431 1/2-433 1/4*, 421-422
Fundamental Notes
- Ukrainian 2024 corn sowing area is likely to decrease by 4.5% to 3.863 million hectares from 4.043 million sowed in 2023, the farm ministry’s first official sowing forecast for this year showed on Monday. -Reuters
Fund Positioning
- Friday’s Commitment of Traders report showed that Funds were net buyers of roughly 40.8k futures/options contracts, 37.5k of that being short covering. That trims their net short position to 255,928 contracts. For those wondering where prices are when Funds were that short on the way down, May corn was at 453 3/4 and Dec was at 477 1/4.
Seasonal Trends
(Past performance is not necessarily indicative of future results)
- Below is a look at price averages for December corn, using the 5, 10, 15, 20, and 30 year averages. Though we believe we can see prices firm from these levels, we would urge Producers to temper the expectations, given the current balance sheet.
Soybeans
Technicals (May)
May soybean futures look to be riding the wave of the 50-day moving average (redline in chart below). Resistance remains intact from 1198-1205 1/2. We think the upside from this pocket is likely limited unless we see a fundamental shift. If the Bulls can get above that resistance, it could spark additional upward momentum via technical short covering.
Bias: Neutral
Resistance: 1198-1205 1/2, 1212 3/4-1216
Pivot: 1184-1188
Support: 1161-1167**, 1125-1130
Fundamental Notes
- Ukraine’s farm ministry forecast shows that farmers could sharply increase the area sown for soybeans this year to 2.199 million hectares from 1.780 million hectares in 2023 because soybeans were almost the only profitable crop in 2023. – Reuters
Fund Positioning
- Friday’s Commitment of Traders report showed Funds have officially ended their record selling streak which totaled 16 straight weeks! The recent report showed Funds were net buyers of about 17k contracts, 13k of which was short covering. That trims their net short position to 155,137 futures/options contracts. Broken down that is 56,290 longs VS 211,427 shorts.
Seasonal Trends
(Past performance is not necessarily indicative of future results)
- Below is a look at price averages for November soybeans, using the 5, 10, 15, 20, and 30 year averages.
Wheat
Technicals (May)
May wheat futures were able to work their way back into our pivot pocket from 550-555. If the Bulls can chew through and close above this pocket, it could spark additional upward momentum on technicals alone. The next upside target would be near 563-570. On the flipside, a continued failure could setup a good risk/reward trade to the sell side. Our take: coin flip.
Bias: Neutral
Resistance: 563-570, 595 3/4–600, 608 1/2-611**
Pivot: 550-555
Support: 525**
Fundamental Notes
- The EU is preparing to impose tariffs on grain imports from Russia and Belarus to placate farmers and some member states, officials familiar with the plans said on Tuesday. -Reuters
Fund Positioning
- Friday’s Commitment of Traders report showed funds were net sellers of roughly 13k futures/options contracts, 12k of which was long liquidation. Funds are now net short 78,870 contracts. For reference, they were net short 120k contracts in November.
Seasonal Trends
(Past performance is not necessarily indicative of future results)
- Below is a look at price averages for July wheat, using the 5, 10, 15, 20, and 30 year averages. Historically this isn’t the most friendly time of year.
