Better weather softened some grain markets, but the possibility of an early freeze is a wild card, given the late start to planting, cautions Oliver Sloup.

Corn (ZCZ)

Fundamentals: Corn futures softened up last week as better weather started to appear on intermediate term forecasts. This is undoubtedly good news for what is in the ground, but there is still an enormous amount of uncertainty regarding how many acres got in the ground. The wild card that is starting to garner more attention is the possibility of an early frost. This is a real scenario, but not one to hang your hat on. Friday’s Commitment of Traders (COT) report showed funds sold 34,0444 contracts, trimming their net long position back to 153,216 contracts. Crop Progress will be out later this afternoon, we would not be surprised to see good/excellent ratings steady with last week (57%).

Technicals: Despite last week’s softer trade, not a lot changed on the technical landscape. Our major support pocket remains intact from $4.18 ¼ to $4.20 ½. The bulls must not only want to see this pocket defended this week; they want to see a springboard off it. A failure could lead to a further technical breakdown. On the resistance side, $4.31 ¼ to $4.32 ¾ is the pocket the bulls need to see consecutive closes above, to encourage buyers to step back in.

Bias: Bullish/Neutral

Resistance: 431 ¼-432 ¾**, 447-450***, 473-475****

Support: 418 ¼-420 ½***, 404 ½-406 ¼****

Soybeans (ZSX)

Fundamentals: November soybean futures were softer last week, but for the most part continued their consolidation. Weather will become bigger factor in the month of August, attention this week will be on trade talks with China. U.S. delegates are headed to Shanghai today, so expect headlines to keep volatility slightly elevated. For well more than a year now, we have been talking about China having the advantage of time on their side; as we head deeper into the U.S. election cycle. Crop Progress will be out later this afternoon, we would not be surprised to see good/excellent ratings steady with last week (54%). Friday’s COT report showed funds bought 446 contracts, narrowly trimming their net short position to 38,489 contracts.

Technicals: The market is treading water near the psychologically significant $9.00 handle as market participants wait for new news to break the market out of the wedge it has been forming (higher lows and lower highs). First resistance to start the week comes in at $9.15 ¼, but the more significant pocket comes in from $9.22 to $9.24. A move out above here could take us to $9.38 ¾. On the support side, the bulls want to defend our support pocket from $8.87 ½ to $8.91 ¾.

Bias: Neutral/Bearish

Resistance: 915 ¼**, 922-924 ***, 934 ¼-938 ¾****

Pivot: 898 ½-900

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

Wheat (ZWU)

Fundamentals: Wheat futures finished last week’s trade on the softer side as market participants remain skeptical on the fundamental and technical backdrop. Friday’s COT report showed funds sold 6,972 contracts, trimming their net long position to 11,779. Funds are short more than 18k KC wheat contracts and a record short 14,410 Minneapolis wheat contracts.

Technicals: This is a big technical week for September wheat futures. Since posting a double top high on June 27, the market has been making lower highs and lower lows, creating a head and shoulders patter in the midst of its downward channel. First resistance to start the week comes in from $5.11 ¼ to $5.16 ¾, the bears have the advantage until the bulls can achieve consecutive closes above this pocket. On the support side, $4.83 ¼ to $4.86 ¼ is the pocket to watch.

Bias: Bearish

Resistance: 511 ¼-516 ¾***, 525 ¾-531 ½****

Pivot: 498-502

Support:483 ¼-486 ¼***, 473 ¾-475****

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

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