Grain markets were sharply higher in the first trading day of the week, will that strength continue in today’s trade or will resistance hold?
Oliver Sloup was on RFD-TV on Monday morning with Scott the Cow Guy, sharing his thoughts on the grain and livestock markets.
Despite Bearish Fundamentals, Could Grain Markets See a Short Covering Rally? – Blue Line Futures
Corn
Technicals (July)
July corn futures had their most impressive up day since the quarterly stocks and prospective plantings report, taking prices right into 4-star resistance at the close, we’ve defended that pocket as 449 1/2-551. This will now act as our pivot pocket. If you had been long from support last week, this would be a spot to consider reducing exposure. If you’re trying to squeeze out a little more, you want to see a close above this pocket to spark another wave of short covering towards 460. Above that and things could start to get quite a bit more interesting, regardless of the fundamental landscape. As mentioned in yesterday’s RFD-TV interview though, we are taking it one day and one level at a time.
Bias: Bullish/Neutral
Resistance: 456 1/2-460*, 471-471 1/2
Pivot: 449 1/2-451
Support: 441 3/4-444 1/2, 433 1/4-436, 422 1/4-424 1/4**
Fund Positioning
- Friday’s Commitment of Traders report showed that Funds were net sellers of about 16k contracts (through 4/16/24), that puts their net short position at 279,570. Broken down that is 161,576 longs VS 441,146 shorts.
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. We update this each Monday. If you’d like to look at different contract months, spreads, etc, let us know and we can send those charts to you.
Soybeans
Technicals (July)
July soybeans saw some follow through from Friday’s rally, taking pries out above trendline resistance 1169 1/4-1173 1/2) which is the first step in an attempt to turn the tide. That momentum helped prices press higher in the overnight trade, hitting our next resistance pocket from 1182 1/5-1186 1/4 (the overnight high was 1184 1/4). This could act more as an inflection point. If the Bulls can chew through and close above that hurdle, we could see prices make a run back at the psychologically significant $12.00 level in relatively short order. With that said, a failure to maintain a foothold above what was previously trendline resistance could take prices to new lows. This week’s trade could have big implications for direction in the coming weeks.
Bias: Neutral
Resistance: 1182 1/4-1186 1/4, 1199 1/2-1204
Pivot: 1169 1/4-1173 1/2
Support: 1150-1155, 1140 1/4-1145 3/4**
Fund Positioning
- Friday’s Commitment of Traders report showed Funds were net sellers of roughly 10.5k contracts, putting their net short position at 167,875 contracts. Broken down that is 45,089 longs VS 212,964 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. Updated each Monday. If you’d like to look at different contract months, spreads, etc, let us know and we can send those charts to you.
Wheat
Technicals (July)
July wheat futures looked like there were going to roll over and make new lows last week, what a difference a few days make. This morning, we see prices attempting to breakout above our 4-star resistance pocket from 590-595. If the Bulls can chew through this pocket, it could trigger another wave higher with the next upside objective coming in near 620. If you want to play the upside in wheat but don’t want the risk with futures, options can be a great way to gain exposure while limiting risk.
Bias: Neutral/Bullish
Resistance: 600-605, 621 1/4-626 3/4**
Pivot: 590-595
Support: 565-570, 550-552 1/4, 537 3/4-539 1/2****
Fund Positioning
- Friday’s Commitment of Traders report showed Funds were net sellers of about 7k contracts. That expands their net short position to 96,403 contracts, their largest net short position since the end of 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.
