Corn: Corn showed weakness early in the week, following through from Friday’s (July 10th) sell off and Sunday nights “gap lower”(see chart below). By Wednesday, the market seemed to be exhausted to the downside and began to bounce for a few reasons. China demand news picked up steam, as well as a gap above on the charts providing some technical support for a move higher and finally the RSI dipped near 30 becoming somewhat oversold which set corn up for the bounce we are seeing now. The weekly range in corn was $3.30^4 for the lows and traded as high as $3.41^2 in todays session. I expect Corn to go fill its gap early next week and that’s where we may see some resistance hold up. If corn can break out over the 50 MA ($3.47), watch for a quick move to $3.55 before pulling back from fundamentals and producer selling at those levels. Most farmers I’ve talked with would be happy to lock some of their crop in at $3.50
Soybeans: As mentioned above for Corn, Soybeans showed weakness from Fridays and Sundays sell off, moving lower to start the week on some good weather over last weekend. The news of China buying nearly 1,000,000 tonnes of our soybeans since Tuesday has strongly supported this week. That coupled with running into the 50 & 100 day MA, as well as the bottom end of the trend channel (see chart below), also helped to support. The range for the week was wide with lows coming in at $8.71^4 and traded as high as $8.96^2 in todays session. I expect this to test the top end of the channel early next week before we see any type of pull-back action. If this trend line is broken, watch for another leg higher towards $9.10 or so.
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