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Daily Grain & Livestock Technicals/Fundamentals

Published on: 13:03PM Aug 21, 2018

Corn (December)

 

Yesterday’s Close:  December corn futures finished yesterday’s session down 1 ½ cents, trading in a range of 6 ¾ cents.  Funds were estimated sellers of 5,500 contracts.

 

Fundamentals:  The market softened up to start the week on spill over pressure from wheat and beans.  Friendly weather through the Midwest has also kept a lid on some concerns which has been preventing the market from breaking out above technical resistance.  Weekly export inspections came in at 1,096,000 metric tons, within the range of expectations.  Crop progress showed good/excellent conditions dropping 2% to 68%, a bigger drop than analysts were looking for but not enough to spark a rally.  Several crop tours, including Pro Farmer’s are beginning this week which will undoubtably draw a lot of attention this week as they make their way through the Midwest.

 

Technicals:  The market failed to take out our key technical resistance pocket which we had defined as 380 ½-382 ½, this gives the bears the advantage in the near term.  this pocket represents a key retracement from the May highs to the July lows, along with the original breakdown point from the August 10th USDA report.  If the bulls can chew through this pocket, it would likely encourage additional short covering from the funds.  The next objective would be 388 ½-389 ¾.  On the support side, the market tested, held, and is testing our first support again this morning at 374.  A break and close below here likely accelerates the selling, the next pocket of support comes in....Click this link for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

 

SOYBEANS (November)

 

Yesterday’s Close:  November soybeans finished yesterday’s session down 4 cents, trading in a range of 15 ¼ cents.  Funds were estimated to have been near flat on the day.

 

Fundamentals:  In yesterday’s report we talked about the recent headlines saying that the U.S. and China would resume talks and how that helped support the market.  We followed that up by saying: ”We would not be surprised to see nothing come of the meeting this week, the market retreat, and sometime in the near future see more headlines of another meeting.  This is shaping up to be a classic buy the rumor sell the news market in our minds.”.  Yesterday afternoon President Trump said he did not anticipate much coming for the trade talks this week (shocker).  Expect the headlines (good/bad) to continue for the foreseeable future.  Due to the day to day headlines we are trying to be nimbler and are avoiding getting married to a particular bias.   Export inspections yesterday came in at 638,000 metric tons, this was within expectations.  Good/excellent ratings in the weekly crop progress report were left unchanged at 66%.

 

Technicals:  On the technical side of things, not much has changed over the past 24 hours.  These back and forth headlines have shaken up the technicals drastically, traders should remain nimble with the understanding that you cannot change the headlines.  We expect volatility to continue, which will present a lot of great near-term opportunities for those not married to a specific direction.  First support this morning comes in from....Click this link for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

 

Wheat (December)

 

Yesterday’s Close: December wheat futures finished yesterday’s session down 16 ¾ cents, trading in a range of 22 ½ cents. M Funds were estimated sellers of 8,500 contracts on the day. 

 

Fundamentals:  Wheat futures rolled over yesterday, erasing nearly all of Friday’s gains.  That weakness has carried over into the overnight and early morning session.  Weekly export inspections came in at 345,000 metric tons, this was within the range of expectations but still pretty pathetic.  Yesterday’s weekly crop progress report showed spring wheat harvest is now 60% complete.

 

Technicals:  The technical picture is starting to become much more bearish as we retest the recent bottom end of the range from 549 ½-555.  A breakdown below here takes us to 539 ½-540 ½, this pocket represents the 50 and 100 day moving average, along with the 50% retracement (middle of the range) over the last year.  This was also the original breakout point from July 25th.  If that gives way, we expect to see accelerated selling via long liquidation from the funds take us back below....Click this link for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

 

 

If you have any questions or would like to discuss the markets in more depth, please do not hesitate to call or email.

Oliver@BlueLineFutures.com

Direct: 312-837-3938

 

 

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Last Trades:

LEV8: -.425 at 110.45, trading in a range of .80

LEZ8: -.025 at 114.65, trading in a range of .90

GFU8: -.675 at 151.15, trading in a range of 1.35

GFV8: -.725 at 151.125, trading in a range of 1.60

 

Cattle Commentary:  Cattle futures were relatively mute to start today’s session, after rallying nearly 1.50 in the last 20 minutes of trade on Friday.  The bulk of last week’s cash trade came in at 110-110.50 live and 173-175 dressed, this was certainly a headwind today and a letdown from moderate expectations.  There will be a lot of new news this week which could keep things relatively choppy.  Outside of watching the cash market we will be keeping an eye on Wednesday’s cold storage report and Friday’s Cattle on Feed report, we will be posting estimates over the coming days.  The wild card will be unannounced trade headlines.  We have toned down our bullish sentiment as the market is starting to feel a little more tired (see full technical breakdown below). 

 

PM Boxed Beef / Choice / Select

Current Cutout Values: / 213.98 / 202.29

Change from prior day: / 2.60 / 1.37

Choice/Select spread: / 11.69

 

Tech Talk

 

Live Cattle (October)

 

Last week we were fairly optimistic on prices, but that has changed as we enter a new week of trade and linger near the top end of the recent range.  October cattle futures finished the day on softer ground after failing to receive follow through momentum from Friday’s strong close.  Today’s price action was uninspiring as the market retreated back below the 200-day moving average.  If the bulls continue to struggle in finding momentum during the first half of the week, we could start to see some long liquidation ahead of Friday’s Cattle on Feed report.  Previous resistance now becomes first support, we see that as 109.55-109.85.  This pocket represents previously important price points and the 50% retracement from the February highs to the April lows. 

 

Resistance: 111.45-112.50***, 114.075-114.75***

Pivot: 110.65

Support: 109.55-109.85***, 107.50-107.90***, 105.125-105.475***

 

Feeder Cattle (October)

 

Feeder cattle poked their head above Friday’s high but retreated as we approached the close.  The inability to garner follow through buying is a caution flag here in the near term.  The bears are in control until the bulls can achieve consecutive closes above 153.20-153.45, this would mark lower lows and potentially take us to lower highs, continuing the trend over the last month.  On the support side of things, 147.45-147.65 remains intact but another test of that pocket could be the one that breaks the camels back.  The more times a level is tested, the less significant it becomes. 

 

Resistance: 153.20-153.45****, 155.375-156.00***

Support: 147.45-147.65***, 146.40**, 145.15**, 144.25***

 

Lean Hog Commentary and Technicals (October)

 

October hogs gave back a big chunk of Friday’s gains, finishing the day 2.00 lower at 56.60, trading in arrange of 3.525.  To say the hog trade has been wild over the past two weeks would be a gross understatement.  The market has been reacting/over reacting to this slightest of triggers as traders (both bulls and bears) remain on edge following a rapid decline over the last two months.  That rapid decline has been halved in just a matter of just a few sessions thanks to positive trade headlines igniting short covering.  We believe the rally is likely over cooked for the time being but are aware that an unannounced headline could change things in the matter of seconds.  We would not be surprised to see the market come into more of a range between 53 and 57.

 

Resistance: 59.65-60.35***, 62.45**, 64.70**

Support: 55.475-55.70**, 52.75-53.15****

 

 

If you have any questions or would like to discuss the markets in more depth, please do not hesitate to call or email.

Oliver@BlueLineFutures.com

Direct: 312-837-3938

 

 

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Better Service, Technology, and Rates!

 

 

 

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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