Grain futures have been mixed in the overnight and early morning trade. Is the relief rally over or are prices just taking a pause?
Corn
Technicals (December) Corn futures were able to chew through the upper end of our pivot pocket which propelled prices to our next resistance pocket 420-422 (Yesterday’s high was 422 1/4). The market then backed off into the pivot pocket which will now act as support. If the Bulls can defend this on a closing basis, we could see continued short covering push prices back to the breakdown point from the June 28th USDA report breakdown point, 430-434. A break and close back below out pivot pocket could turn things back to the bearish side for a potential retest of the low end of the range. If the market can achieve a third straight higher close today, it would be the first time in two months. Reminder: Friday is August options expiration; this could have an impact on price action. With these options trading off September futures, it’ll be interesting to see if $4.00 Sep. futures is a magnet.
- Bias: Bullish
- Resistance: 420-422, 430-434**
- Pivot: 413-416 1/2
- Support: 399-403**
Below is an hourly chart of December corn futures
Soybeans
Technicals (November) November soybeans tested the 20-day moving average and our 3-star resistance pocket in yesterday’s trade but failed to sustain momentum above there through the afternoon session. Today that pocket comes in from 1085 1/2-1087. This pocket represents trendline resistance from the May highs as well as the 20-day moving average, an indicator that we haven’t seen the market close above since May 28th. A close about a dime off the highs led to some initial selling in the overnight trade, taking prices 3/4 of a cent below yesterday’s low (likely on a stop hunt) but have rebounded back near unchanged. If the Bulls can get out above that resistance pocket, it could spur additional short covering towards the technically and psychologically significant $11.00 level. Our pivot pocket from 1061 1/2-1062 3/4 will be the line in the sand to keep an eye on through the remainder of the week. A break and close back below there could trigger additional technical selling.
- Bias: Bullish
- Resistance: 1085 1/2-1087, 1099-1101**
- Pivot: 1061 1/2-1062 3/4
- Support: 1046-1050*, 1025-1031 3/4
Below is a daily chart of November soybean futures
Wheat
Technicals (September) Trendline support on the daily chart remains intact, in the chart below we zoom in on the hourly chart to give a clearer picture. The fact that trendline support is holding is a silver lining, the fact that we are also making lower highs is not. Also, not a great sign is the lack of a bounce when corn and beans were able to take on more meaningful gains in the prior two sessions. To spark a bigger relief rally, the Bulls need to get out above 553 1/2-556 1/4.
- Bias: Neutral/Bullish
- Resistance: 553 1/2-556 1/4, 579-583 1/4
- Pivot: 537-539
- Support: 525 1/4-530**
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