Corn has rallied to end the week after a dismal start. Thursday’s close over 375^4 in May has continued the trend to the upside with 380^0 and 385^0 as the next points of resistance. With flooding across a large portion of the Midwest any potential adverse weather could cause planting delays which would be supportive. The U.S./China trade talks haven’t been able to gain much traction lately and it looks as if no one really knows if or when an agreement will be reached. With a large net short position held by funds and the possibility of a bullish shift in fundamentals mentioned above, corn could see a rally through spring and early summer. Export sales this week came in line, but nothing compared to what it could be if China came in as buyers. May corn needs to push through this initial resistance at 380^0 to maintain the current trend. Support comes in at 371^0 and if that level can’t hold expect to see the market trade back down to the lows around 361^0. Corn has a story forming that could cause a rally but if the fundamentals don’t line up it will be hard for the market to hold on to these recent gains.

May soybeans have seen choppy trade this week. The soybean market is holding out for news of a U.S./China trade agreement for support as well as watching the weather. If there is any delays in planting corn, more acres could switch to soybeans which would add to the already high world ending stocks number. Export sales this week were disappointing for the bulls, coming in well below expectations. South American production numbers with good weather forecasted the next two weeks as well as strong yields are also pressuring the market. In the May contract, support comes in at 900^0 and then around the recent lows of 890^0. Resistance levels are 912^0 and 919^0. In the short term in looks like soybeans could see a rally but barring any surprises in the fundamentals the longer-term outlook still looks bearish.

Corn May ’19 Daily Chart

Corn May '19 Daily Chart

Soybeans May ’19 Daily Chart

Soybeans May '19 Daily Chart

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Tyler Herrmann

Senior Market Strategist
Tyler attended Kansas State University where he majored in Agricultural Economics. He started his career in the futures industry with an IB in North East Kansas where he worked with farmers and cattleman to hedge their risk in the market and protect profits with a variety of futures and options strategies. Most recently Tyler has joined RJO Futures as a market strategist.
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