Daily Grain Technicals & Fundamentals (10.1.18)

Published on: 12:54PM Oct 01, 2018

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Corn

 

Last Week’s Close:  December corn futures finished Friday’s session down 8 ½ cents at 356 ¼. For the week, futures lost 1 ¾ cents, trading in a 12 ¼ cent range. Friday’s Commitment of Traders report showed funds were buyers of 33,569 futures through September 25th, shrinking their net short position to 124,855 futures.

 

Fundamentals:  Friday’s USDA report was more bearish than expected with ending stocks coming in at 2.14 billion bushels, this compares to the pre-report estimates of 2.010 billion bushels.  The U.S. and Canada reached an agreement over the weekend which the markets are seemingly shrugging off (not all that surprising).  With the report behind us, attention will turn back to harvest and reported yields.  If we continue to see this big crop get bigger, we can expect continued pressure on prices.  The silver lining for the bull camp is the seasonality of a harvest low coming in.

 

Techncials:  December corn futures traded very technically sound following the release of the USDA report.  In Friday morning’s report we said: “We continue to see significant resistance from 366-369 ¾, this pocket represents the original breakdown point from the USDA report on August 12th, the 50-day moving average, and the top end of the most recent range.  If you’re bearish the market, this is the spot to get aggressive against on the first test.  If the market fails to gain traction above resistance, we would not be surprised to see the market retreat back towards 355 ½.”  The high was 366 ¾ and the low was 354 ½.  If the bulls are unwilling to step in and buy, we would expect to see prices back below....Click this link for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

 

Soybeans

 

Last Week’s Close:  November soybeans finished Friday’s session down 9 ½ cents at 845 ½. For the week, futures lost 1 ¾ cents, trading in a 22-cent range. Friday’s Commitment of Traders report showed funds bought back 22,091 futures through September 25th, shrinking their net short position to 60,126 futures.

 

Fundamentals:  Friday’s USDA report was more bearish than market participants were expecting, quarterly stocks came in at 438 million bushels, above the average trade estimate of 401 million bushels.  The U.S. and Canada reached an agreement over the weekend but has little affect on soybeans.  With the report behind us, the focus this week will be harvest reports from the field.  There is a lot of bearish news out there, much of which is priced in, which could lead to a harvest low coming into play soon.  The wild card continues to be headlines regarding potential trade progress with China.  Though the bears are in control technically and fundamentally, this puts a knee jerk rally in play.

 

Technicals:  November soybean futures tested the top end of our resistance range which we had defined as 858-863 ¼ in last week’s daily Grain Express reports.  The bearish USDA report coupled with a technical failure led to pressure to wrap up the week.  Futures are little changed this morning, but we expect to see volatility pickup when we get more participation on the floor open.  850 is an obvious pivot point, but the key support pocket we are keeping an eye on comes in from 831 ¾-837 ¼.  A break and conviction close below here opens the door for a run at....Click this link for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

 

Wheat

 

Last Week’s Close:  December wheat futures finished Friday’s session down 4 cents at 509. For the week, futures lost 12 ¾ cents, trading in a 25 ¾ cent range. Friday’s Commitment of Traders report showed funds bought 8,478 futures through September 25th, putting their net long position at 227 futures.

 

Fundamentals:   Friday’s USDA report came in neutral to bearish with ending stocks reported at 2.379 billion bushels, a hair above the average analyst estimate of 2.343 billion bushels. The market’s initial reaction was a move higher on short covering, that was then sold into as weakness in corn and beans spilled over into wheat.  Prices are near unchanged this morning as market participants wait for more participation on the floor open.

 

Technicals:  Wheat worked lower off of technical resistance into the USDA report and continued to work lower following.  Technical resistance remains intact from 523 ½-526.  This pocket represents a key retracement on the year and the 200-day moving average.  A conviction close above here would neutralize the chart, until then, the bears remain in clear control.  If the bears continue to pile on, we would not be surprised to see prices work lower with a target of....Click this link for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable 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.