The grain complex rebounded from trade related overnight weakness to post positive results on the day, reports Oliver Sloup.
Corn (ZCZ)
Yesterday’s Close: December corn futures finished yesterday’s session up 5.75¢, trading in a range of 15.5¢. Funds were estimated buyers of 16,000 contracts.
Fundamentals: The market was down hard before the regular open yesterday, on the back of another breakdown in trade talks. When the session opened, we saw willing buyers’ step into the market, (an example of why we take the overnight with a grain of salt). Concerns regarding production remain, which will keep some sort of floor in the market. Yesterday’s Crop Progress report showed good/excellent ratings at 57%, in line with expectations, down 1% from last week.
Technicals: Yesterday’s reversal of the lows was as encouraging as it gets, defending last week’s low and the psychologically significant $4.00 handle. With that said, the bulls still have some work to do. Previous support now becomes resistance.
Soybeans (ZSX)
Yesterday’s Close: November soybean futures finished yesterday’s session down 2.25¢, trading in a range of 20¢. Funds were estimated sellers of 1,000 contracts.
Fundamentals: The market reversed off yesterday’s lows as market participants weighed the recycled trade headline and potential production disruptions for this year’s crop. Yesterday’s Crop Progress report showed good/excellent ratings at 54%, in line with expectations, unchanged from last week.
Technicals: Yesterday’s drop filled the gap from May 28, which held and then spring-boarded prices on the open. This is extremely encouraging price action for the near term.
Wheat (ZWU)
Yesterday’s Close: September wheat futures finished yesterday’s session up 3¢, trading in a range of 15.75¢. Funds were estimated buyers of 2,000 contracts.
Fundamentals: Wheat futures traded in tandem with the broader Ag markets in yesterday’s choppy session. Yesterday’s Crop Progress report showed spring wheat conditions at 73% good/excellent, unchanged from last week, 1% below expectations. Winter wheat harvest is 82% complete, 2% behind expectations.
Technicals: The trend has been lower highs and lower lows, for that trend to remain intact the bears need to defend the resistance pocket.
Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com.
