Grains Head Down Amid Improved Weather Conditions
Grains such as soybeans and corn opened the week with a positive gap; however, both units are trading negative on the day. The reason is improved weather conditions in the U.S. midwest.
On the other hand, Successful Farming analyst said in a recent report, “some analysts believe the USDA overshot in its report and believe the corn acreage figure will come in well below the agency’s forecast.”
So, whom we should believe? As for now, the market thinks the USDA and the WASDE report are right, and grain prices are trading depressed. A piece of good news for farmers, which is improved weather in their farms, but it is also bad news because prices per bushels are going down.
Commerzbank analysts said in a daily note that “amid the ongoing trade disputes between the U.S. and China, high stocks and the expectation of a high South American crop, many market participants see no reason to believe in any lasting price recovery.”
Also, the CoT reported a decline in the long positions for corns to the lowest since May. Investors were net long 21,527 corn contracts, the smallest bullish stance in the week of May 28.
On the other hand, soybeans watched how their net-bearish contracts declined to 67,203 contracts, according to the Commodity Futures Trading Commission, below the 76,318 reported the previous week.
Wheat net-long positions declined to 4,000 contracts from 7,121 the previous week.
Corn opens near to 3.80, but it trades down
Corn is trading down on Monday after opening with a positive gap near to 3.80 per bushel. Currently, prices of corn are moving at 3.75 per bushel, reporting 1.21% daily decline from the opening price.
Technical conditions suggest a recovery on the cards with the 3.80 as immediate resistance. Above there, please check for the 3.87 level as the next selling zone. To the downside, 3.70 is the new support. Below there, 3.58 is a critical level.
Soybeans sustain opening price near to 8.74
Soybeans also opened the week with a positive gap at 8.74, then the unit attempt new highs near to 8.80 and then fresh lows at 8.70; however, the unit erased all that noise, and it is trading now at 8.74, 0.98% positive in the day.
Technical studies are showing certain bullish interest in the market, but the indicators are not strong enough. As for now, the unit has resistances at 8.80, 8.85, and 9.00.
To the downside, 8.70 is the immediate support. Below that level, 8.58, 8.50, and 8.44 are the zones to watch.
Wheat contained by the 4.77 level
Wheat remains trading in the same range it has been trading in the last five trading days between 4.66 and 4.77.
On Monday, the unit jumped to test the upper side of the range, but it was unable to break above that level. Then, it declined to 4.73, where it is moving right now with 0.48% daily declines.
Technical indicators suggest that all odds are poised for the downside, with the mentioned 4.66 level as the immediate support. Below there, check the 4.55, 4.47, and 4.30 as the next buying zones.