Are Grains Set For a Rally?
Jan 22, 2018
Last Weeks Close: Corn finished the week 5 ¼ cents higher, the biggest weekly gain since the beginning of July. That really puts things into perspective when you think of how bland this market has been. Fridays Commitment of Traders report showed funds sold 4,360 contracts (through Tuesday), this puts their net short at 226,876 futures and option contracts. The record net short is just a stones throw away at 230,556.
Fundamentals: Lack luster rain sin South America, particularly in Argentina have helped support corn in the overnight and early morning session. They had a report released on Friday that showed nearly half of their crop had a rating of poor to very poor; roughly 12% is rated as good. Despite the concerns in South America, there is still a lot of corn out there. Due to the government shutdown, weekly USDA reports will be unavailable this week; this would include export inspections and export sales.
Technicals: March corn future gaped higher on the Sunday night open which is encouraging for the bulls in the market, they will want to see confirmation through volume on the floor open. This is the top end of the range, so we continue to keep our expectations tempered. If the market can see follow through we could see short covering from the funds press prices towards....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Last Weeks Close: Beans finished the week up 12 ½ cents, closing higher each of the four days (shortened trading week), trading in a range of 21 ½ cents. Friday’s Commitment of Traders report showed funds sold 9,997 futures, putting their net short position at 105,705 (through Tuesday) which is one of the largest on record.
Fundamentals: With the USDA reports behind us, attention has turned back to South American weather and crop development. As of the last report, 37% of the Argentina soybean crop is rated good/excellent. This will continue to be monitored as we get into the next few months as the crop develops. As far as weekly USDA reports, those are on hold until we get a resolution to the Government shutdown.
Technicals: Soybean futures started Friday on strong footing but backed off towards the end of the day on a failure to breakout above technical resistance. The market has gaped higher and is testing that technical resistance yet again, that comes in from 983 ½-986 ¾. This pocket represents the 50 and 100 day moving average, along with the 50% retracement from the June lows to the July highs. If the bulls can achieve a conviction close above resistance, that could encourage additional short covering towards....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Last Weeks Close: Wheat futures finished the week up 2 ¾ cents, trading in a range of 14. Friday’s Commitment of Traders report showed funds sold 13,453 futures, this puts their net short at 148,969 (through Tuesday). This is one of their larger short positions on record.
Fundamentals: Cold and try weather has been a topic of conversation as of late and a catalyst for bulls to get behind. Recent moisture maps suggest that 44% of winter wheat producing areas are under drought conditions. We will get a better idea of the crop in the coming weeks. Due to the government shut down, USDA reports like export inspections and export sales will not be released until there is a resolution.
Technicals: Wheat futures have worked hard to gain back some of the losses from the last USDA report, but the bulls still have a lot of work to do to encourage additional short covering. First technical resistance today comes in at....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
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