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Grains Under Pressure Ahead of USDA Report

Published on: 16:14PM Jan 08, 2018

CORN (March)


Last Weeks Close: Corn futures finished the first week of the year up ¼ of a cent, trading in a range of 4 ½ cents.  Fridays Commitment of Traders report showed funds reduced their net short position by 8,957 contracts, putting their net short at 189,536 futures.

 

Fundamentals:  This week’s focus will be on Fridays USDA report which has the potential to give us new direction.  We will continue to compile estimates and have those for you in the coming days.  Weather and crop development in South America continues to be a big catalyst for the market.  Corn used for ethanol production has been a nice silver lining for the market, but the strong trend took a step back last week.  Corn use for ethanol dropped from 112.4 million bushels down to 106.5mb.  Weekly exports were also dismal last week with a read of 101,200 metric tons, this compares to the expected range from 600,000-900,000 metric tons and the previous weeks read of 1,245,500 metric tons.

 

Technicals:  On the technical side of things, the market has been in a narrow range for several months. We have been in the camp of playing a nickel on either side of 350 until we get a new fundamental catalyst to give us a breakout or breakdown. First technical resistance for Mondays trade will come in at...Please sign up for a Free Trial with Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

SOYBEANS (March)

 

Last Weeks Close: March soybean futures finished the week up 7 ¼ cents, trading in a range of 18 ¼ cents.  Fridays Commitment of Traders report showed funds extended their net short position to -87,834, an increase of 16,457 futures from the previous week.

 

Fundamentals: Soymeal and oil helped offer support to soybeans last week, but this week’s focus will be on the USDA report which will be released on Friday at 11 am cst.  We will continue to compile estimates and have those for you in the coming days.  Weather and crop development in South America will also continue to be a key catalyst; there is not much new news on that front to report this morning.  Weekly export sales last week came in at 554,000 metric tons, this was a hair below the low end of expectations.

 

Technicals: The market has managed to stabilize well following a dramatic uninterrupted 68 cent meltdown in December. Significant resistance comes in from...Please sign up for a Free Trial with Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

WHEAT (March)

 

Last Weeks Close:  March wheat futures finished last week up 7 cents, trading in a range of 9 ½ cents.  Fridays Commitment of Traders report showed that funds reduced their net short by 16,537 which puts their net short at 135,523.

 

Fundamentals: Colder and dryer temperatures have offered support to the market, but seasonal weakness continues to reign supreme.  If you had sold March wheat on January 3rd and bought in back on the 16th, you would have been profitable for 12 of the last 15 years with the average gain being roughly 17 cents.  Fridays USDA report will be the highlight of the week, we would not be surprised to see some position squaring ahead of that.

 

Technicals: We have been referencing the 50-day moving average for months now as key resistance. The market is lingering right around it as we were not able to see a convincing trade above it yet. If we start to see consecutive closes above, we could see short covering towards...Please sign up for a Free Trial with Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

 

 

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