Grain Market Dips: Awaiting Further News– May, 27th 2024

Grain markets await the USDA acreage report: technicals offering mixed signals.

Technicals (May):

• Corn: May corn futures continue to struggle after failing to overcome the 50-day moving average resistance. A close below the critical support level of 431-435 could trigger further selling, with the next potential support coming in at 421-422. Resistance remains at 441 ¾ -444 ½.
• Bias: Neutral-to-Bearish
• Soybeans: May soybean futures retreated to their starting point for the week, finding support at the previously resistant 50-day moving average. Additional support remains around 1175-1181. Resistance sits at 1212 ¾-1216.
• Bias: Neutral
• Wheat: May wheat futures slipped below the critical support zone of 550-555, increasing the risk of a retest of the range’s lower end near 525. Bulls will need to reclaim 550-555 to regain control. Resistance sits at 563-570.
• Bias: Neutral-to-Bearish

Fundamental Notes:

• All Grains: The highly anticipated USDA acreage report is due today. Analysts expect corn plantings to fall between 90.0 million and 93.5 million acres, with soybean plantings estimated between 85.3 million and 88.0 million acres. Wheat plantings are expected to be near 47.3 million acres.
• Corn & Soybeans: Quarterly stocks for both corn and soybeans are forecast to be higher year-over-year, with corn stocks potentially reaching a 5-year high and soybean stocks reaching a 2-year high for this time of year.
• Market Closure: Remember, grain markets will be closed tomorrow in observance of Good Friday.

Fund Positioning:

• Corn & Soybeans: Large funds exhibited cautious optimism last week, reducing their net short positions in corn and soybeans by buying futures contracts.
• Wheat: Large speculators maintained their net short position in wheat.

Overall:

The grain market is tentative; many investors maintain skeptical neutrality in preparation for future news regarding tomorrow’s grain report. As planting season in the Northern Hemisphere nears, more news will undoubtedly emerge in the coming weeks. Additionally, weather concerns in South America may reduce crop yield from top producers in Argentina and Brazil.