Daily Grain Market Commentary (7.20.18)
Jul 20, 2018
Yesterday’s Close: December corn futures finished yesterday’s session up 4 ½ cents, trading in a range of 7 ¼ cents. Funds were estimated buyers of 12,000 contracts on the day.
Fundamentals: Corn traded higher yesterday thanks to a few fundamental nuggets, exhausted sellers, and anxious buyers. We saw ethanol production pick back up in Wednesday EIA report which was a tiny silver lining. A slightly bigger silver lining came in the for of export sales yesterday, coming in at 1,415,500 metric tons, well above the expected range from 500,000-1,100,000 metric tons. Weather is continuing to be monitored but will be a diminishing catalyst as the clock continues to tick.
Technicals: We changed our bias from “Neutral” to “Neutral/Bullish” in Tuesday morning’s report as technicals started to shift. The bottom formation continues to move forward in a constructive manger. The price action this week has been gradual which in our opinion bodes well for the process, as opposed to a knee jerk higher. The strong close above the pivot point at 360 opens the door for additional short covering and is an invitation to new buyers. Our next resistance pocket comes in from....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Yesterday’s Close: November soybeans finished yesterday’s session up 4 ½ cents, trading in a range of 10 ¾ cents. Funds were estimated buyers of 3,000 contracts.
Fundamentals: There were headlines early this morning that President Trump is “ready to go” with regards to another $500 billion in tariffs on China. The market sold off 10 cents but has recovered. Perhaps the rebound is an indication that a majority of the bad news has been priced in. We will want to see prices hold when we get more participation on the floor open. Yesterday’s weekly export sales were in line with expectations, keeping us ahead of schedule, which you wouldn’t guess by a lot of the recent headlines. Weather has not been much of a threat for most, and it continues to look relatively favorable going forward.
Technicals: In Tuesday morning’s report, we shifted our bias from “Neutral” to “Neutral/Bullish”. Yesterday’s session was a make or break day for us on the technical side of things. Had prices rolled over and close back below 850-854, we would likely be looking at red this morning. That pocket will continue to be pivotal going forward. The market is testing our first resistance pocket, we have outlined this as 866 ¾-872 in the previous days reports. A conviction close above this pocket really gets the party going, but we are....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Yesterday’s Close: September wheat futures finished yesterday’s session up 8 ¾ cents, trading in a range of 15 ½ cents. Funds were estimated buyers of 6,000 contracts.
Fundamentals: Wheat found strength yesterday in what was a broad rally for the grains. There continues to be concerns over the global crop, this has helped prices hold higher ground relative to the action seen in corn and beans over the last two months. Export sales yesterday morning came in at 300,000 metric tons, within the range of expectations from 150,000-500,000 metric tons.
Technicals: We remain longer term bearish this market but warned on Tuesday that we could see a move to 510 ½-514 ½ first, and this would be the pocket to get more aggressive. That pocket has shifted down to 509 ½, this represents trendline resistance from the May 29th high. Also in the resistance pocket is the 50 and 100 day moving average, a key retracement on the year, and the July 6th highs. From the risk reward perspective, bears have a great opportunity hear. A failure here would....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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