Tech Guy Opening Calls & comments for 7/7/22
Sep Wheat - 2 to 3 Lower
Sep Corn - Steady
Dec Corn - 3 to 4 Higher
Nov Soybeans - Steady to 1 Lower
December Corn was up over +20 cents at 608.75 for the high print of the day on news of drier and possibly warmer forecast for the corn belt. The gap down from Tuesday was completely filled.
This is step 1 for confirmation of an exhaustion gap (a downtrend is exhausted when an asset has moved too far down and there are no more sellers). We will see if tomorrow gives us more confidence on the reality of this exhaustion - to confirm it, we need a close above 606 (top of the gap).
Here is an example of a downside exhaustion gap from corn in July 2011.
Like I mentioned a few day's ago the funds figured they have to start putting more risk premium into the corn and bean market. Did traders take all the risk premium out with the irrational fears of a Great Depression 2?
In Dec Corn, did traders take all of the premium plus $1.10 more - $6.80 level? The answers to these questions will slowly be revealed by the trade. I do have a feeling the 680 level is a balanced price which has some risk premium but not "flash drought" risk.
It seems like the balance price for November Soybeans is about 1470, ($1.05 higher from the close today). Beans did not close it's gap. It will get filled over the next couple of trade sessions - then, we will have a better idea about Nov Beans strength.
Keep watching the 6-10 day forecast. For the last couple of days it has trended to less rain and higher temps. If this trend continues, funds will keep buying
August Crude Oil Update: As anticipated, 104.48 (105 area) proved to be a resistance level today. Support is between 102-100 for another run up towards 112.