Corn & Soybeans Tech Update
Grain Market Commentary
Wednesday, August 9, 2017
by Jacob Christy, Freedom Program Trader
A quiet day for Ag markets as trade prepares for tomorrow’s USDA crop report. Included in the government release will be the first national yield change from the USDA since June. With yields so highly debated, it seems only fitting that both corn and beans sit near mid-range heading into the report. Though prices lie in limbo today, the market’s composition (or lack of one) most likely means prices won’t stay put for long.
Looking at the charts shows both corn and bean are in no man’s land technically. For corn, the 374-375 mark has now held five price breaks since November making it key support, while Initial upside targets sit just above the market at the major moving averages from 388-391. Needing only a 10c break to clear support or 5c rally to breach the moving averages, the corn chart looks vulnerable to bigger moves if the USDA surprises tomorrow. The same can be said for beans.
Nov17 soybean futures have been on a wild since June 30th. A $1.25 rally from the June 30th low to July 11th high has been followed by a 75c break. Like corn, beans now sit near mid-range in a small but shaky area between support and resistance. The contracts 200-day moving average, which held support most of July, now offers resistance at 986, with the combination of the old low, chart gap, and both the 100- and 50-day moving averages provide support just below 960. The market is 70c away from the major June low and July high, which both seem in the realm of possibility by month end depending on tomorrow’s data.
All in all, both the corn and bean market sit precariously between a rock and hard place in the charts. As always technicals will take a back seat to fundamentals on report day tomorrow. With that said, both markets sit only a few cents away from both key support and resistance, meaning the short term technical direction could be set soon. Add in a fund chomping at the bits to establish new positions, and new price trends for both markets could lie just on the horizon.