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Grains Enter Full Blown Weather Market as Funds Exit Longs
07/17/2019 10:47 am EST
Grain weakness continues as funds abandon long positions, reports Oliver Sloup.
Yesterday’s Close: December corn futures finished yesterday’s session down 6.25¢, trading in a range of 11.75¢. Funds were estimated sellers of 18,000 contracts.
Fundamentals: It is a full-blown weather market, and that means a choppy trade for the foreseeable future. Crop conditions improved over the last week, but a hot and dry forecast could keep them from improving much more, ahead of Monday’s Crop Progress report. On top of weather uncertainty, there are still a lot of question marks over planted acres. These concerns will likely keep a floor in the market until we get a better understanding of how many acres got planted.
Technicals: There was a trendline from the contract lows on May 13 that was tested and held on July 2, July 11t and again yesterday.
Yesterday’s Close: November soybean futures finished yesterday’s session down 14.75¢, trading in a range of 15.75¢. Funds were estimated sellers of 10,500 contracts.
Fundamentals: As mentioned in the corn section, most market participants are keeping their eye on weather and the affects it may have on crop development. Crop conditions improved over the last week, but a hot and dry forecast could keep them from improving much more, ahead of Monday’s Crop Progress report. On top of weather uncertainty, there are still a lot of question marks over planted acres. There were talks of trade talks progressing but that seems to be the favorite recycled headline when there’s nothing else to report.
Technicals: Soybeans worked lower yesterday but have managed to find some technical support just above the psychologically significant $9.00 handle.
Yesterday’s Close: September wheat futures finished yesterday’s session down 1.5¢, trading in a range of 9¢. Funds were estimated sellers of 1,000 contracts.
Fundamentals: Wheat futures were softer yesterday but held their own all things considered (broader grain complex under more pressure). Though we still have a bearish tilt on wheat, we would not be surprised to see a pop higher in the very near term. If this were to happen, we would likely work with clients to sell the rally.
Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com.
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