Corn futures tested a big level of support last week at $3.25 and held up mainly because at the end of the day, demand is still steady enough to hold those prices. That being said, China had its largest single day purchase last week, and the market was barely able to bounce, which has the “bulls” a little disappointed in the price action. Assuming demand dies down, or even weather remains ideal moving forward, don’t be surprised to see this level broken and make a push for $3.00 potentially in the Dec. contract. Keep in mind there is still a gap on the charts up around $3.43, and any type of bullish catalyst should send prices towards those levels.
Soybean futures finished last week pushing higher after touching the bottom of the trend channel. As mentioned last week, the beans seem to really be stuck in a technical trade, bouncing off the bottom end of the trend channel and pushing right back to the top end, before eventually failing again. It will take weaker demand and continued good weather in order to see a major push lower. Until then, I don’t expect any surprises from the bean market, just watch for it to continue this technical pattern until fundamentals give it a reason to do otherwise. With thoughts of yields being increased, there is a chance we see some pull-back action into the August 12. Look for the $9.00 level to be a psychological level of resistance, as well as a longer term trend line being hit.
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