Support levels in Corn, KC wheat, and Soy meal were hit today. Will they hold? Corn and wheat have long term bull stories but outside influences like Secretary Lighthizer’s comments on trade with China bemoaning anything meaningful regarding a deal in meetings last week were a reason to sell today. Notice that the stock market and energies ignored that data, while traditional safe havens like metals and treasury futures also failed to rally. Charts attached
Corn
We violated corn today closing below 373.4/372.6, closing at 371.2 Look for a retest at 373.4/374 overnight into tomorrow. A close over 374 is needed near term or I think 365 will be ultimately be tested. A close below one trend line (373) takes you to the next trend line (364) coming up from the yearly lows at 3.64 this week.
KC Wheat
491.4 has to hold or 485 its next. Under 485 it gets ugly , perhaps 20 cents lower to 465. Why would we break that much? Funds pushing it there would be the easier answer amid longs getting stopped out while shorts press. I’m looking to buy here with both hands but will remain patient with all the rhetoric and saber rattling with gov’t shutdown and trade wars.
Soymeal
A major line at 309.3 on the weekly chart would spell doom if we had a hard close under and perhaps would prompt beans lower, which would pull corn and wheat lower perhaps in tow. I have plenty of option spread and future spread ideas, that we can take advantage of if we hold here. However, let’s keep it simple, if we hold this line, buy futures with a tight stop under. Call me for specifics.
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