Daily Grain Technicals & Fundamentals (10.11.18)
Oct 12, 2018
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Yesterday’s Close: December corn futures finished yesterday’s session up 6 ¾ cents, trading in a range of 12 ¾ cents. Funds were estimated buyers of 20,000 contracts for the day.
Fundamentals: Corn bulls finally got the gift they were looking for, yesterday the USDA lowered yield, production, and a carryout number that was under analyst estimates. The average U.S. corn yield came in at 180.7, down .6 bushels from last month, this drops production down to 14.778 billion bushels. U.S. ending stocks came in at 1.813, the average analyst estimate was 1.919 billion bushels. Weekly export sales were released this morning, coming in at 1,006,000 metric tons.
Technicals: Yesterday’s report provided more confirmation for the bulls as the market continues to grind higher. With the report behind us, we can now saw that the bulls have the advantage right here, right now. The bulls will want to see a conviction close above 369 ¾ to cement their footing, we believe this would encourage additional short covering from the funds. The 100-day moving average comes in at 373 ½, with another barrier coming in just above at 375 ¾. If the bulls can chew through these levels the next target is 386-387 ¾.
Resistance: 373 ½-375 ¾**, 386-387 ¾****
Pivot: 369 ¾
Support: 365 ¾**, 354 ½- 355 ½**, 350***
Yesterday’s Close: November soybean futures finished yesterday’s session up 5 ½ cents, trading in a range of 17 cents. Funds were estimated buyers of 7,000 contracts on the day.
Fundamentals: Soybeans rallied yesterday on the back of a friendly USDA report, but the looming concern regarding trade has kept that rally in check. The USDA had U.S. yields coming in at 53.1 bushels/acre, this was up from 52.8 but below analyst expectations. Production came in at 4.69 billion bushels, lower than estimates and below last months. U.S. ending stocks came in at 885 million bushels, this was also below estimates. Export sales this morning came in at 439,700 metric tons.
Technicals: Soybeans continue to be stuck in a range, basically 850-870, both of which we have had listed as support and resistance respectively for the past few weeks. The bear case is compelling but may have run its course as much of the information is priced in to the market. If the bulls can achieve consecutive closes out above 870, we would expect to see short covering and momentum buyers press the market towards the 100-day moving average which comes in at 890 ¾. Only a close below 850 will turn our bias.
Resistance: 870 ¾-875***, 890 ¾***, 901 ¾-907****
Support: 850**, 831 ¾-837 ¼****, 825-826 ¾***, 812 ¼****
Yesterday’s Close: December wheat futures finished yesterday’s session down 3 cents, trading in a range of 14 ½ cents. Funds were estimated sellers of 5,000 contracts on the day.
Fundamentals: Wheat futures got an initial post pop from the USDA report but that quickly fizzled as market participants looked at the numbers more closely. Ending stocks came in at 956 million bushels, this was above analyst expectations and above last months estimate of 935 million bushels. The market is trying to find its footing thanks to some positive momentum in the corn market. Export sales this morning came in at 330,000 metric tons.
Technicals: The wheat market has been trading in a bit of a wedge which typically sets up for a bigger directional move. Yesterday’s USDA report wasn’t a big enough catalyst to give us that move, but the market still feels ready to move. Our technical support pocket held yesterday and today (so far), we have had that defined as 505 ¼-506 ¼, a break and close below here takes us back to the July lows of 490. On the resistance side of things, the market failed again at our pocket from 523 ½-527 ¾. This is a trend changing pocket, a move above here puts the bulls in the driver’s seat.
Resistance: 523 ½-527 ¾**, 531 ¼-532 ¾***
Support: 505 ¼-506 ¼***, 495 ¼-496**, 490***
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