Grain Market Update (2.20.18)
Feb 20, 2018
Last Week’s Close: March corn futures traded 5 ¼ cents higher through last week’s trade; thanks to a gap open last Sunday futures only traded in a 4 ½ cent range. Friday’s Commitment of Traders report showed that funds had bought back 79,656 futures, putting their net short at 5,216. Keep in mind that this data is through Tuesday and funds are probably net long real time. Hard to believe roughly a month ago they were sitting on a record short position.
Fundamentals: The market is starting the shortened trading week with some strength thanks to some spill over from the soybean market. Weather concerns in Argentina continue to be the key catalyst in the intermediate term as concerns over the drought have several analysts walking back yield and production numbers. March option expiration n Friday could keep a lid on things for this week’s trade. Going into option expiration we like to look at strike prices that have a lot of open interest on both the puts and the calls, this can help act as a magnet into that expiration. 365 is the strike of significance as of right now.
Technicals: Corn prices continue to linger towards the top end of our resistance pocket which we have had defined as 366 ½-369; this pocket represents a key Fibonacci retracement; it was also the top of the range going back to September and October. The next objective for the bulls 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.
Last Week’s Close: March soybeans surged higher last week, finishing up 37 ½ cents with a trading range not much bigger at 39 ¼ cents. Friday’s Commitment of Traders report showed that funds bought back 49,431 futures contracts which has them now net long 36,866 contracts. This data is only compiled through Tuesday, so it is likely they are closer to 50,000.
Fundamentals: Weather concerns in Argentina continue to be the key catalyst in price action. Parts of Argentina are extremely bad which will more than likely have serious implications on final production numbers. We continue to keep a very close eye on the meal market as Argentina accounts for nearly half of the world shipments every year. March option expiration is on Friday, it does not appear that there are any significant strikes like there are for corn.
Technicals: The break out above 1006 has helped set the stage for the run higher and it doesn’t look like the bulls are done yet. So long as the market can keep traction above 1020-1027 (previous resistance now becomes support) the market looks poised for a continuation towards....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Last Week’s Close: Wheat futures also finished the week higher, with March futures finishing up 8 ¾ cents, trading in a range of 15 ¾ cents. Friday’s Commitment of Traders report showed that funds bought 31,283 futures contracts, this puts their net short at 46,973 futures.
Fundamentals: As with corn and soybeans, wheat futures are in a bit of their own weather market with continued concerns over lack of moisture in some key growing areas. If the severe rough areas continued to be missed by rains in the very near future, we could start to see realized crop damage. We are keeping an eye on the Kansas City futures contract as it will likely be the leader. The USD has been chopping around recently but remains near the low end of the range, this has also helped support commodities like wheat. The bulls will want to see this reflected by better exports.
Techncials: The market has been consolidating sideways for the last two weeks as the bulls and the bears wait to see a new directional move. We continue to believe that there are headwinds from 469 ¾-472 ¾. On the support side of things, 448 ¼-452 ¼ is the first pocket; a break and close below opens the door to a run towards....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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