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Grains surge higher

Published on: 12:56PM Oct 16, 2018

Corn (December)

 

Yesterday’s Close:  December corn futures finished yesterday’s session up 4 cents, trading in a range of 6 ¾ cents. 

 

Fundamentals:  Yesterday’s Crop Progress report showed harvest is 39% complete, still ahead of the 5-year average despite recent delays for some.  Good/Excellent ratings came in at 68%, unchanged from last week.  Weather will continue to be monitored through the Midwest with wet/winter weather causing harvest delays.  If the weather breaks, we would not be surprised to see some premium come back out of the market.  Funds have been covering short positions and are likely now net long the market. 

 

Techncials:  The move above 370 last week has continued to encourage short covering which has fed into momentum traders jumping in on the long side.  Yesterday’s convincing move above the 100-day moving average and a key retracement bode well for the bull camp.  If the bulls can continue to defend support, we expect to see the market work towards....Click this link for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

 

Soybeans (November)

 

Yesterday’s Close:  November soybean futures finished yesterday’s session up 24 cents, trading in a range of 28 ½ cents. 

 

Fundamentals:  Soybeans caught a big bid to start the week, thanks to some bullish fundamental developments.  It was reported that the US sent two cargoes of beans to China, something the bulls believe could turn into a trend.  Weather in the Midwest has also put a premium into the market as some areas are at a harvest standstill.  Yesterday’s Crop Progress report showed harvest is 38% complete, well behind the 5-year average pace of 53%.  The big delays are in Iowa, Minnesota, North Dakota, and South Dakota where harvest is 32%, 31%, 33% and 36% behind the 5-year average.  NOPA crush came in at 160.779 million bushels, well above the expectations.

 

Technicals:  In yesterday morning’s report we said: “Our resistance pocket from 870 ¾-875 was defended by the bears last week, but a retest this week would likely lead to another round of short covering. The chart has been more constructive as of late and if the bulls can get this next leg higher we would mark higher lows and higher highs, giving the bull camp a clear advantage for the intermediate term. The next line in the sand for resistance comes in at 889.”.  This played out well for those who were able to jump on board.  If you were able to be long we would recommend....Click this link for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

 

Wheat (December)

 

Yesterday’s Close:  December wheat futures finished yesterday’s session up 7 cents, trading in a range of 11 ¼ cents.

 

Fundamentals:  Wheat was the beneficiary of corn and beans working higher, prompting some spillover momentum into wheat.  With that said, if corn and beans start to pull back, that will be a bigger headwind for wheat in the very near term.  Weather continues to be monitored through the Midwest as winter wheat planting continues to roll onward (for most). 

 

Technicals:  Wheat worked higher yesterday, bring prices right back to the top end of our resistance range which we have had defined as 523 ½-528.  If you are bearish the market, this is the pocket to sell against.  We have been in the bearish camp for a while and working to sell rallies with clients for the past several months.  The recent price action has us a little more skeptical this time around, so we are sitting on our hands for now with a “Neutral” bias....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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