Yesterdays Close: March corn futures finished yesterdays session down ½ of a cent, trading in a range of 3 ¼ cents. Funds were estimated sellers of 5,000 contracts.
Fundamentals: Recent weather in Argentina has prompted concerns over yield loss, if realized this could be a catalyst to achieve a technical breakout and encourage short covering. We have February option expiration on Friday and 350 looks to be the magnet. As of this morning there are roughly 33,000 open calls between 350 and 355. On the put side, there are roughly 27,000 open between 350 and 345. Strikes with high open interest tend to be a magnet into expiration. We had mentioned in yesterdays report that export inspections would not be released due to the government shutdown, we were then told otherwise shortly after our release, so we apologize for that. Export inspections came in at 668,944 metric tons, this compares to the expected range from 800,000-1,000,000 metric tons; last weeks was 584,389 metric tons.
Yesterdays Close: March soybeans gaped higher on the open, finishing the session up 8 ¼ cents, trading in a range of 7 ¼. Funds were estimated buyers of 7,000 contracts.
Fundamentals: Hot and dry weather in key growing areas in Argentina sparked the gap higher yesterday and the market managed to hold ground on the back of those concerns. If we start to see moisture work into the forecast, you can expect that premium to come out of the market. Export inspections yesterday morning came in at 1,419,430 metric tons, this was above the top end of the expected range from 1,000,000-1,400,000 metric tons. Last weeks number came in at 1,231,037 metric tons. February option expiration is this Friday, it is possible that this could keep a lid on another leg higher but there’s nothing significant to report in terms of significant open interest at a specific strike (like corn).
Technicals: The market has managed to close higher for 6 of the last 6 sessions and it appears we could see number 7 today. Despite the march higher, the RSI (relative strength index) is only at 60. Technical resistance has been tested yesterday and is again being tested in the early morning session. We have defined resistance as 986 ½-987. This pocket represents the 100-day moving average and the 50% retracement (middle of the range) from the June lows to July highs. If we fail to see an extension we would not be surprised to see the market come back to support wit the first line in the sand coming in at....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.
Yesterdays Close: March wheat futures gaped higher yesterday and finished up 4 cents, trading in a range of 4 ¼ cents on the day. Funds were estimated buyers of 2,000 contracts.
Fundamentals: Export inspections yesterday morning came in at 337,980 metric tons, this was within the expected range from 250,000-400,000 metric tons; last weeks was 368.651 metric tons. We know that funds have established a solid net short position, but we do not see any fundamental catalyst at this point that would spook them out just yet. Demand continues to be lackluster which will likely keep a lid on any significant rally. February option expiration is on Friday, there is nothing that sticks out in terms of strikes with significant open interest.
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.