Another failed breakout in soybeans while corn and wheat try to build a higher floor

Corn Technicals (May)

May corn futures continue to linger near our pivot pocket, 453 1/2-455.  May options expiration tomorrow continues to be something to take note of, with the most open interest in puts and calls at 450.  We would not be surprised to see this keep a bigger rally in check into the end of the week.  If you're still in May corn, you may want to consider exiting or rolling before the weekend.  To get all the daily levels, seasonal charts, and fund positioning charts, use the link at the bottom of this article. 

December Corn

As mentioned in yesterday's write-up, we continue to look at pullbacks in December corn as a good risk/reward opportunity to the long side.  There are a few catalysts that could add tailwinds to prices including inflation, fertilizer concerns (could keep demand strong and pull some forward), elevated oil prices, to name a few.  Another factor that is neither fundamental nor technical is the psychological aspect that nearly everyone agrees that this market has no reason to rally.  If you've trading futures for a while, you probably have learned that if everyone is in agreement, a caution flag pops up.  As with any commodity market, there's never a reason for a market to stage a bigger than expected rally until after the fact.  To cover for this "outlier" event, we like looking at limited risk short dated (trades off new crop futures) calls and call spreads.  If you haven't talked to the desk and want to discuss this strategy, please don't hesitate to reach out (312-278-0500), that's what we are here for!  

Soybean Technicals (May)

Soybean futures did it again! Prices were knocking on the door of the top end of the range, which nearly led to a breakout.  However, the Tuesday night/Wednesday morning strength failed again and sent prices right back to the 20 and 50 day moving averages.  As mentioned in yesterday's commentary, the new crop November contract appears to be a little more constructive as the range bound trade continues to work up and to the right, while old crop is more sideways.  Opportunities remain plentiful for shorter term traders who can park their bias and focus on the trading range.  As mentioned in the corn section, our trade desk is here to help so don't hesitate to reach out!

Wheat Technicals (May)

May wheat futures are consolidating over the last few sessions as prices try to build a near term base above the 20-day moving average and our pivot pocket, 595-600.  First resistance was tested and held yesterday, keeping our pocket intact from 613 3/4-616.  A move above here and we could be looking at a swift move to 622 3/4-625. 

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