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Grain futures got hit hard yesterday after failing to defend significant support levels.  Where's the next line of defense?

Corn

Seasonal Trend in Play

• September corn futures have trended lower for 12 of the last 15 years from 4/30-6/24. 

Technicals (July)

July corn futures were under pressure yesterday, closing below our pivot pocket, 586-588.  In yesterday's morning report we wrote that: "A failure to hold here likely takes prices back towards the low end of the range, 569-572."   Here we are, right back at the bottom end of the recent range.  We feel this represents an opportunity for both the Bears and the Bulls.  If you've been bearish and sold the top end of the range at the start of the week, you may consider reducing some of that exposure.  If you're Bullish, this is a decent risk/reward spot to give the long side a shot.  A close below the low end of support would neutralize that bias.  All in all, we would not be surprised to see the market continue to consolidate within this 30-cent range, which would continue to present some great opportunities for traders on both sides of the market (Bulls and Bears).

 

Bias: Neutral Previous Session Bias: Neutral Resistance: 595-601****, 614-616*** Pivot: 586-588 Support: 569-572***, 545-550****

Soybeans  Seasonal Trend in Play The next Seasonal Trend for soybeans is for the July contract and starts on May 28th. Technicals (July) July soybean futures got taken to the woodshed yesterday after breaking through significant support from 1380-1385.  In yesterday's report we wrote about what could happen if that pocket gave way, writing "If this pocket gives way, it could trigger additional selling pressure with little support until 1355 3/4-1362 3/4.".  Here we are, trading in that pocket this morning.  The Bulls MUST defend this through today's trade, a failure to do so could trigger additional pressure, with little support until our next pocket, 1355 3/4-1362 3/4.  Despite there being some great intraday trading setups, our intermediate term bias remains Neutral.

 

Bias: Neutral Previous Session Bias: Neutral Resistance: 1425-1435***, 1458-1462*** Pivot:  1396-1402  Support:  1380-1385****, 1355 3/4-1362 3/4****

Wheat Seasonal Trend in Play None Technicals (July) Wheat futures couldn't find any follow-through in yesterday's trade, following an impressive rally on Monday that took prices near resistance 665-670.  That will remain a big hurdle for the Bulls to get over.  If they can chew through it, that could spark the short covering rally that we've been talking about for a while now.  625 is the line in the sand for the Bulls to defend on the support side.

 

Bias: Bullish Previous Session Bias: Bullish Resistance:  665-670***, 717-722***, 730-735*** Pivot: 640-650 Support: 625***, 600-605**

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Grains Soybeans Corn Wheat

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