After a brief opening higher last night, beans and wheat did an about face and moved lower as funds in my view continued to unwind. July beans hit a key trend line on the weekly chart coming in at the 936-939 are this week. Please see chart. The downward trend line comes in at 936 this week and was drawn from the the all time high in 2012, to the high in 2014 on down the page. The trend line moving up the page is from the 2015 low drawn to the 2016 bean low. To me this is a key area where these lines converge. A failure here would mean the market moves to 910 and potentially to 8.80 in my view. I wouldn’t discount anything here in the bean market with this tariff talk. Should this hold though, I would look to be a buyer of some cheap calls for August or consider buying either the Dec 18/July 19 soy meal spread at 6.0 over or the Nov 18/Nov 19 bean spread at 1.0 to 2.0 over. Corn acted as tail of the dog today following beans lower but I think it has a chance to work higher once this potential tariff deal and trade war that’s all over the news is behind us. A fifty percent retracement of this recent break takes July corn to 390 while Dec corn can move to 4.09 in my opinion.
Please join me this Friday for a grain and livestock webinar at 3pm. We discuss supply, demand, weather, and the technical set up with near and long term trade ideas. Sign up is free and a recording link will be sent to your email. Sign Up Now