Market was trading higher electronically as much as 100 pts after a very favorable export sales report confirmed business is moving at a strong pace at these levels. This lead to improved technicals with the market trading above the 9-day moving average and locals were able to find buy stops which ran into good scale up trade selling above 59.00.
Volume was better today with the futures estimated over 20,000 contracts and options of 17,000 as the market closed near the high end of the trading range.
Specs have been pulling back their long position the last several weeks as today seemed like the first time they may have added to this position in quite a while. Fundamentally, we still have a big crop in the pipeline, but short term the momentum does look friendly after a 3rd week of 400k plus sales.
However, the stock market and the U.S. economy are still very uncertain looking into the second half of the year, but grains were up today and supportive. We will have to see if corn can continue to hold strong as the new crop may be bigger than anticipated.
Technically, we closed above the 9-day moving average on a nice gap up breakout. After breaking out of the flag pattern on Monday, the market is found upside momentum above 58 c/lb. The gap down last Thursday has made the upside resistance still hold at 59.50, and the next level of resistance would be the 60.00 cent level.
The stock market and grains are mixed so hard to say how tomorrow's last trading day of the month will play out as we will certainly try and test the highs as RSI is now in the mid 40's.
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