New crops that were planted late may face additional weather risk as forecasts turn hot and dry, reports Oliver Sloup.

Corn (ZCZ)

Fundamentals: There were fireworks in the corn market last week (pardon the pun). Weather patterns for the next two weeks have shifted towards hotter and dryer conditions, which has sparked some concerns. If the hotter and dryer weather persists and becomes a trend, we would expect to see that stress the immature crop. Crop progress will be released after the close today, once the market digests that information, traders will turn their focus towards Thursday’s WASDE report. We will have estimates out over the coming days.

Technicals: Last week, December corn futures found and held our technical support pocket from $4.17 ¾ to $4.20. This pocket represents the gap from May 24, the 50% retracement from contract lows to contract highs, and the 50-day moving average. The market is now working into significant resistance, with several indicators from $4.47 ¼ to $4.54. This wide pocket includes a key Fibonacci retracement and the breakdown point from June 28. A failure here would start to form a bearish head and shoulders formation on the chart.

Bias: Bullish/Neutral

Resistance: 447 ¼-454****, 473-475***

Support: 442 ¼-443 ½**, 417 ¾-420***, 399-406****

Soybeans (ZSX)

Fundamentals: The market has struggled to hold ground following a friendly USDA report less than two weeks ago. Attention is back to weather and how that will affect the development of this year’s crop, weekly crop progress this afternoon will give us an updated look at that. On Thursday we will get a WASDE report, we will have estimates out in the coming reports. The spread of African Swine Fever (ASF) will likely continue to be a headwind on an already weak demand market.

Technicals: November soybeans saw a choppy session last week, on a light volume trade. The market continues to test support, but the bulls need to see more of a springboard reaction to get the ball rolling in the right direction again. We see that support as $8.87 ½- to $8.91 ¾, this pocket represents the 50-day moving average, a key retracement, and other previously important price points. First resistance to start the week comes in from $9.10 ¾, the 100-day moving average, the 50% retracement, and resistance in the back half of last week’s trade.

Bias: Neutral

Resistance: 910 ¾-915***, 934 ¼-938 ¾***, 948-950**

Support: 887 ½-891 ¾***, 875 ¼**, 855 ½-862 ½****

Wheat (September)

Fundamentals: Wheat futures have managed to feed off positive momentum from the corn market over the past few sessions, but we continue to be skeptical on the market itself and feel that wheat would have a hard time rallying on its own. Ending stocks remain high and demand may have a hard time keeping up with it. We will get an updated look at those numbers in Thursday’s WASDE report.
Technicals: The market managed to hold technical support perfectly last week, we had defined that as $4.98 ¾ to $5.02. The bulls got the springboard reaction they wanted and now see prices trying to work back above the 200-day moving average at $5.16, this will be the pivot point for today’s session. A move above here lends hand to another 10¢ of upside in the near term. A failure likely takes us back down to technical support.

Bias: Bearish/Neutral

Resistance: 525 ¾***, 535-536 ¼**, 562 ¾**

Pivot: 516

Support: 498 ¾-502***, 486 ¼-491 ¾**, 473 ¾-475****

Oliver Sloup provides technical levels on all markets throughout the week at BlueLineFutures.com.

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