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Daily Grain Technicals and Fundamentals (8.1.18)3

Published on: 13:04PM Aug 13, 2018

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Corn (December)

 

Last Week’s Close:  December corn futures finished Friday’s session down 11 ¼ cents, extending losses for the week to 13 ¾ cents after trading in a 17 ¼ cent range. Friday’s Commitment of Traders report showed funds bought back 27,588 futures through August 7th, trimming their net short position to 68,025.

 

Fundamentals:  Friday’s USDA report was bearish, there’s no way in spinning that into a silver lining.  Yield estimates from the USDA came in at 178.4, up from 174 in last month’s report and above the average estimate.  Higher yields lead to a bigger than expected production number, that came in at 14.586 billion bushels.  New crop carryout also came in higher at 1.636 billion bushels, up from the 1.552 we saw in the July report.  If you want to be a buyer in this market, we would recommend letting the dust settle first.

 

Technicals:  The market erased two weeks of gains in the matter of a few hours following Friday’s USDA report.  The market is now testing our support pocket which we have defined as 366 ¼-369, this was previously a more significant pocket, but recent price action has us skeptical.  If this pocket gives way on a closing basis, we would not be surprised to see a run at....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

Soybeans (November)

 

Last Week’s Close:  November soybeans finished Friday’s session down 42 ¾ cents, extending losses of the week to 43 ¼. For the week, futures traded in a 53 ¾ cent range. Fridays Commitment of Traders report showed funds bought back 16,853 futures through August 7th, trimming their net short position down to 64,066.

 

Fundamentals:  Soybeans rolled over hard following the release of Friday’s USDA report.  Yields, production, carryout, all came in well above the average estimate which led to a technical breakdown.  The USDA has yields at 51.6 bushels per acre, this is up from the 48.5 we saw in last month’s report and above most expectations.  Production came in at 4.586 billion bushels, this is up from 4.310.  The carryout number came in at 785 million bushels, well above expectations and the highest on record.  The ace in the whole for the bulls would be if China and the U.S. were able to strike a deal.

 

Technicals:  The market broke through 881 ½ Friday which puts the bears back in total control for the time being.  If the bulls cannot reclaim this level, we could see the market work back towards the July 16th lows of 826 ¼.  We believe there will be an opportunity for bullish market participants to buy, but....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

Wheat (September)

 

Last Week’s Close:  September wheat futures finished Friday’s session down 17 ¼ cents, putting prices in negative territory for the week by 12 ¼ cents. Futures traded in a 40 ½ cent range for the week. Funds were estimated buyers of 15,751 futures through August 7th, extending their net long position to 53,732 futures.

 

Fundamentals:  Wheat rolled over Friday along with corn and beans, that pressure has carried over into the overnight and early morning session.  All wheat production came in at 1.877 billion bushels, down from 1.881 in last month’s report.  Carryout came n at 935 million bushels, down from 985 in last month’s report.  We know that hot and dry weather had been a catalyst in supporting prices recently, those headlines have run their course and are not enough to keep the rally alive, so we are seeing long liquidation.

 

Technicals:  Wheat futures are now 60 cents off of their highs of the month as the technical breakdown has led to long liquidation.  The breakout point last month came from 518-521 ¾, this will act as first support.  This pocket represents the 50 and 100 day moving average, along with the 50% retracement (middle of the range) for the year.  If you have been short, this would be the area to consider....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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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.