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Grains rally on weaker USD

Published on: 14:12PM Jan 25, 2018

CORN (March)

 

Yesterdays Close:  March corn futures closed 5 cents higher yesterday, trading in a range of 7 ¼ cents on the session.  Funds were estimated buyers of 21,000 contracts.

 

Fundamentals:  There was a sale of 125,000 metric tons to an unknown destination yesterday.  Weekly export sales will be released tomorrow morning due to the government shut down at the beginning of the week.  Yesterdays weekly EIA ethanol report showed production at 1,062,000 barrels per day, this was steady with last weeks 1,061,000 barrels per day.  Weather concerns in Argentina have helped support the market as the prospect for yield loss is seemingly more likely.  We feel the USD was a bigger story yesterday as it plunged to multi year lows, making exports more appealing.  Funds obviously helped move the market more than it may have if they had more of a neutral position.  We have been talking about option expiration this week, noting that there is a lot of open interest between 345 and 355, making 350 a likely magnet.  Though not much has changed on the open interest front for those strikes and it is not out of the questions, it seems as though the market may have other plans.  There is an ECB (European central bank) meeting this morning that could put additional volatility into the Euro which will trickle into the dollar and dollar-based commodities.

 

Technicals:  Corn futures saw their biggest gain in months as fundamentals encouraged technical short covering.  The market is now pressing up against the next resistance pocket which we have listed from....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

 

SOYBEANS (March)

 

Yesterdays Close:  March soybean futures finished yesterdays session up 4 ½ cents, this after trading in a range of 14 ½ cents.  Funds were estimated buyers of 7,000 contracts.

 

Fundamentals:  Soybeans rallied yesterday but were the clear lager in the grain complex as weather in South America is not as pressing as an issue for beans.  With that said, if we see the extended forecasts continue to trend towards hotter and drier, we could see a bigger premium come into the market.  We mentioned a seasonal buy around the corner in yesterday’s morning report that is for May soybeans.  If you had bought May beans on January 28th and sold on February 26th for the last 15 years, you would have been profitable for 13 of those 15 years with the average gain being roughly 28 cents.  Export sales are due out tomorrow due to the government shut down at the beginning of the week. 

 

Technicals: Soybeans had been knocking on the door of resistance for the first three sessions this week, which we mentioned in yesterdays report as being favorable to the bulls.  Each time a technical level it is tested it gets weaker, similar to a wrecking ball against a building.   The bears really wanted to see clear cut rejection instead of a lingering market.  The breakout above the 50% retracement and 100 day moving average has led to additional short covering from the funds and have the market pressing against the next resistance pocket which 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.

 

 

WHEAT (March)

 

Yesterdays Close:  March wheat futures finished the session up 10 ¾ cents, trading in a range of 13 cents on the day.  Funds were estimated buyers of 13,000 contracts.

 

Fundamentals:  The US Dollar is continuing lower this morning on the back of the Treasury Secretary yesterday and the ECB (European Central Bank) meeting this morning.  With the US Dollar at multi year lows, funds are covering short positions as the prospect for better exports becomes more likely.  Export sales will be released tomorrow due to the government shutdown early in the week.  Weather continues to monitor but the main story is currencies and funds.

 

Technicals:  The market saw a conviction close above technical resistance yesterday which has encouraged additional momentum in the overnight and early morning session.  The market is now making a run towards the next resistance pocket from....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.

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