Grain markets had an impressive finish to last week’s trade but are pulling back in the overnight and early morning trade. A healthy correction for buyers to step in, or more pressure to come?
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Corn
Technicals (July)
It looked like we were going to blow the doors open Friday morning with July corn futures accelerating higher, only to fall flat about 10 minutes after the floor open. Prices retreated and have found their way back to our pivot pocket to start this week’s trade, we outlined that last week as 456 1/2-460. A failure to defend this pocket on a closing basis would start to neutralize some of the bullishness that started developing over the last three-weeks.
Bias: Bullish
Resistance: 471-474 3/4***
Pivot: 456 1/2-460
Support: 448-451, 441 3/4-444 1/2*
Weekly Commitment of Traders Update
Friday’s Commitment of Traders report showed Funds were net buyers of about 20.5k futures/options contracts, 50% of which was short covering. Their net short position now stands at 218,040 contracts. Broken down that is 176,044 longs VS 394,084 shorts.
Weekly Seasonal Trend Update
Below is an updated look at the seasonal averages for December corn futures. Seasonally this is a time of year where we start to see more premium come into the market. Whether or not that plays out this year or not is TBD.
*Past performance is not necessarily indicative of futures results.
Wheat
Technicals (July)
July Chicago wheat futures had a strong day on Friday but struggled to find additional buyers above the recent highs. Weakness has crept in in to start the week, whether or not that continues is TBD. The run higher has been impressive, but the lack of new longs seems to be a bit of a caution flag for the time being. Significant resistance remains intact from 635 1/4-369.
Bias: Neutral/Bullish
Resistance: 621 1/4-626 3/4****, 635 1/4-639**, 655-666****
Pivot: 600-605
Support: 590-595****, 565-570***, 550-552 1/4***
Weekly Commitment of Traders Update
Friday’s Commitment of Traders report showed funds were net buyers of nearly 30k futures and options contracts, about 29k of which was short covering. Funds are now net short 47,866 contracts, the smallest net short position since last July. Broken down that position is 78,382 longs VS 126,248 shorts.
Weekly Seasonal Trend Update
The price chart looks constructive but historically this isn’t a great time of year to get super bulled up on wheat.
*Past performance is not necessarily indicative of futures results.
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