Strong planting conditions are being overshadowed by renewed worries over US-China Trade, reports Oliver Sloup.
Corn (July)
Fundamentals: July corn futures tried to breakdown Monday, following a weekend of favorable weather that helped producers stay ahead on planting. Monday’s Planting Progress report showed U.S. corn is 51% planted, above the estimates and well above the 5-year average, 39%. The fact that the market is higher in the early morning session is a good sign for producers and speculative longs, but they will need to see it hold through the open. Yesterday’s export inspections came in at 1,217,000 metric tons, above the top end of estimates.
Technicals: The market held relatively well into Monday’s close and the overnight price action is encouraging too. The planting progress report had a bearish tilt, but the market was not able to break lower. This could be a fundamental rejection, a near term friendly sign for the market, but we will want to see confirmation of the overnight price action. The chart is still bearish, but Consecutive closes above $3.20 to $3.25 would be the first step in neutralizing the chart, putting an end to the trend of lower highs. We have also marked higher lows so far this week.
Bias: Neutral/Bearish
Previous Session Bias: Bearish/Neutral
Resistance: 320-325***, 330-333****, 343 ¼-344 ¾**
Pivot: 316-317 ¾
Support: 308 ¼-310*** 298 ¾-301 ¼**
Soybeans (July)
Fundamentals: Soybeans took a hit on Monday as tensions mount between the United States and China, raising concerns over the trade deal and the potential for more tariffs and less trade to come. Weather over the weekend was good, helping U.S. producers get the crop in the ground at a great pace. Monday’s Planting Progress report showed that the U.S. soybean crop is 23% planted, ahead of expectations and well above the five-year average pace, 11%.
Technicals: The market retreated and held our pivot pocket again, defined as $8.29 to $8.34. We wouldn’t be surprised to see the market settle into a range in the near term between our pivot pocket and 4-star resistance, $8.57 to $861 ¼.
Bias: Neutral
Previous Session Bias: Neutral/Bearish
Resistance: 857-861 ¼****, 871 ¼-875**
Pivot: 829-834
Support: 818-821***, 808 ¼***, 791**
Chicago Wheat (July)
Fundamentals: Wheat futures started the week under pressure but manage to rally into the afternoon session. Export inspections came in at 536,000 metric tons, within the range of expectations. Spring wheat planting is said to be 29% complete, within the range of estimates, but behind the five-year average of 43%. Winter wheat Good/Excellent conditions are at 55%, 2% above expectations.
Technicals: Wheat futures tested and held our 3-star support pocket again, that remains intact on a closing basis. We have seen decent recoveries off the lows recently, indicating that there are bargain buyers as we approach the $5.00 handle. With that said, the Bear camp is still in control until we see consecutive closes above $5.25 to $5.29.
Bias: Neutral/Bearish
Previous Session Bias: Neutral/Bearish
Resistance: 538-540 ½**, 552-554 ¾***, 562-565½****
Pivot: 525-529
Support: 506 ¼-512 ¼***, 491 ¾-494 ¼****
Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com. Please sign up at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each day. Email us at info@bluelinefutures.com to start the conversation and set up a phone call with our experts.
