Market Information

July corn is trading now in the bottom 1/3 of its lifetime range while July soybeans are trading in the top 1/3 of their lifetime range. One fundamental driver being the fact that the farmer still holds corn and not soybeans. Additionally, seasonality is taking a firm hold meaning that traders know that holding long positions after 50% of the next crop is planted is normally a losing proposition. A new seasonal July rally could ensue but the fundamental driver, mainly weather related, is not yet showing up.

July corn has made a couple bearish crosses in the past two weeks. The 10-day moving average has crossed below the 20 and 50-day moving averages. Both Fibonacci support levels at 478 and 466 have given way. The 200-day moving average at 456 has been breached. This is the place that, in the previous two years, corn futures have continued to fall, making lows in August below $4.

Two things could happen to turn values higher. First, approval of year-round use of E15 could offer a boost but we are currently under an EPA rule waiver allowing E15 without much of a boost in corn price. Second, China could be a corn buyer under the recently announced White House agreement for them to buy $17 billion dollars’ worth of US ag commodities. The most glaring problem that spot corn values have is the fact that the July:Dec corn spread has widened to 25 cents carry. The market sees no need to bid for old crop corn.

July soybeans continue to trade in the top 1/3 of lifetime range but has recently made a bearish 10/20-day moving average cross and is poised to form the next bearish cross of the 50-day moving average. Old crop soybeans should be sold now.

December corn is poised to make a new bearish cross of the 10/50-day moving average today. Fibonacci support is 475. 475 is the current sell stop. Catchup sales are advised.

November soybeans are poised to make its first bearish cross of the 10/20-day moving averages today but continues to trade comfortably in the top 1/3 of its lifetime range supported by soybean oil/energy markets. With the crop off to a good start its time to reevaluate your targets and catch up on sales if needed.

I’m displaying both the HRW and SRW contract side by side. Note that both contracts have been down 10 of the past 11 sessions. The KC HRW contract made a bearish 10/20-day moving average cross yesterday. The Chicago SRW contract is poised to do so soon. Catchup sales are warranted.