Grain markets are softer in the early morning trade. Is the top in?

Corn Technicals (July)

July corn futures made it back near the top end of the range from March, after trading higher for 6 of the last 7 sessions.  This rare air may be a good spot for the market to catch it's breath and for producers to play some defense, which we talked about in yesterday's afternoon video.  Despite the potential for more intermediate term tailwinds, the near term concern is that we see a pocket of turbulence from the wheat market, which had a bearish reversal yesterday. After a sharp move higher there, the risk was mounting of a healthy correction at any given moment, which we are seeing playout this morning.  If wheat does see additional corrective price action and profit taking, corn would likely struggle to brush that off initially.  The first line in the sand for support from these levels comes in from 470 3/4-472 3/4.  A failure there and 462-463 1/2 is the next area of interest.

Our optimism and thought that December corn could surprise to the upside remains intact.  With that said, from a trading perspective, we feel it's prudent to capitalize/monetize moves, especially in a market that saw 8 consecutive days of higher price action that took prices right to the edge of such a psychologically significant price point, $5.00.  The two-week rally has brought the RSI into overbought territory for the first time since March.  As mentioned in the July section, the near term concern also comes from the potential of a correction in the wheat market, whether that be a short term blip or a longer term top, it would be hard for corn to ignore that initially. 

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Soybean Technicals (July)

July soybeans posted a new high close since being trapped in this range for the last month and a half.  The overnight open saw initial strength, but that has reversed and is showing signs of a failed breakout.  If the Bulls fail to find their footing after the open, we don't think anyone would be surprised to see prices slip back towards the middle or low end of the range.  Our pivot pocket continues to be watched closely, that remains intact from 1194 1/2-1195.  Yesterday we talked about prices above that opens the door for 1199-1201 1/4, which was achieved.  Now a failure here and that opens the door for 1182 1/4-1185.

New highs for the November contract were marked overnight, but that strength has reversed and turned to weakness.  Continued pressure keeps the downside open to 1156-1158.  Below that and the Bullish trend could be in more danger.  If you're a producer, it may not be a bad time to play some defense.   Don't hesitate to reach out to our trade desk for recommendations. 

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Wheat Technicals (July)

Prices surged higher yesterday but had an ugly reversal which leaves a mark on the chart.  Profit taking in wheat has put prices back about 25-30 cents off yesterday's high, which is starting to give the appearance of a blowoff top (for now).  Prices are back below our pivot pocket from 649 3/4-651 1/4.  A failure to find their footing there through today's trade could keep the pressure on with the next downside objective coming in from 633-636.  

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