Tradable Opportunities in Grains

Outside Markets & Headlines

Not a whole lot of new news coming into the Wednesday morning trade. Outside markets have seemingly settled with stock indices modestly higher and oil futures relatively mute. The US Dollar moved sharply higher in the first two days of the week but is catching it’s breath this morning as it retraces some of yesterday’s gains. This may be playing a role in calmer waters as the “unwind” trade across a number of commodities stalls (at least temporarily).

Corn

Technicals (May)
May corn futures staged an inside day yesterday (traded within the prior day’s range), but left a bearish looking tail on the chart. After failing near the prior day’s high, the market reversed to finish near the low end of the day’s range. Despite the poor optics, no significant damage was done on the chart. In the early morning trade, prices linger near our pivot pocket from 447-448 1/4. Significant support comes in below the market, from 439 3/4-441 3/4. We are currently viewing that pocket as an inflection point. A failure to defend that and we could see more technical price pressure, until then we remain halfway upbeat on prices.

Technical Levels of Importance
Resistance: 453-454 1/2****, 460-461***
Pivot: 447-448 1/4
Support: 439 3/4-441 3/4****

Fund Positioning
Friday’s Commitment of Traders report showed funds were net buyers of 29,079 Futures contracts. Broken down, that was 18,994 of short covering and 10,085 of new longs. This is the smallest net short position since January 6th, 12,830.

Seasonal Tendencies
Below is an updated look at historical price averages over different time frames, 5, 10 ,15, 20, and 30 years. Historically the month of March has proven to be on the choppier side, with shorter term price averages looking more favorable than the longer term ones.