Corn: The story this week (as usual for this time of year) will remain focused on two things, demand for corn (from China and ethanol both), and weather. More widespread rains covered the Midwest this last weekend, but still were missing key parts of Iowa and some of Illinois as well. The outlook moving forward shows these parts of Iowa and Illinois getting .75-1 inch of rain this week, which is weighing on the market this morning. Technically speaking, there is still the gap above at $3.43^6, which as I mentioned last week, I expect this to be filled before seeing much more downside. I think you can look to buy dips along the bottom trend, looking for this to cover the gap, using a stop 3-4 cents below the trend support. Once the gap is filled, I think being patient and waiting for the market to provide a more definitive entry point would be wise, this would also be a spot to look at booking profits or trailing a stop if you do buy along the bottom trend line.
Soybeans: As mentioned with corn, we will closely be watching demand out of China this week, as well as the favorable weather we have in the forecast. This morning, the demand story is outweighing the weather, because frankly, the weather outlook can change by the end of business today. Technically speaking, the market should be running out of steam soon, and look for resistance to at least temporarily hold on the top end of this channel. ($9.02-$9.03) This would be the first spot I think you can “take a shot” at being short the beans, but I strongly suggest using a stop somewhere around the 200-day MA at $9.10-$9.11.
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– U.S. Soybean Export Sales and USDA Forecast
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