The full version of our daily grain commentary

Published on: 14:13PM Nov 12, 2018

Grain Express

 

November 12, 2018

 
 

Corn (December)

 

Last Week’s Close: December corn futures finished Friday’s session down 4 ¼ cents, putting prices in negative territory by 1 ¾ cents for the week. Futures traded in a 13-cent range through the week. Friday’s Commitment of Traders report showed funds bought 2,992 contracts through November 6th, extending their net long position to 14,562 futures.

 

Fundamentals: With the USDA report behind us, our attention will turn towards money flow and crop developments in South America.  Market participants will also want to keep a close eye on the U.S. dollar as it surges to new highs on the year, a possible headwind for exported commodities.  Crop Progress this afternoon is all but meaningless, but for those still keeping tally, expectations are for corn to be 88% harvested, 2% ahead of the 5-year average pace.

 

Technicals:  The market is working higher this morning, but bulls should take it with a grain of salt and temper expectations.  Overnight trade happens on light volume which can be misleading at times.  The market is hovering near the 100-day moving average this morning, which happens to be right in the middle of our significant support and resistance pockets.  Significant technical support comes in from 360 ¼-363, this pocket represents the low end of the range through the middle and back half of October, as well as a key Fibonacci retracement.  On the resistance side of things, our pocket comes in from 375 ½-379.  This pocket represents the top end of the recent range and also contains various previously important price points. 

 

Bias: Neutral

 

Resistance: 375 ½-379****, 386-387 ¾***

Pivot: 367 ½

Support: 360 ¼-363***, 354 ½-356 ½****

 

 

Soybeans (January)

 

Last Week’s Close: January soybean futures finished Friday’s session up 7 cents, trimming losses for the week to just ¾ of a cent. Futures traded in a 29-cent range through the week. Friday’s Commitment of Traders report showed funds bought 31,049 contracts through November 6th, cutting their net short position nearly in half, to 38,866 futures.

 

Fundamentals:  The market finished last week’s trade near where it started as the market wrestled the USDA report and headlines regarding trade.  We do not believe there is a trade deal in sight but are aware that the Chinese stock market (Shanghai Composite) is down roughly 25% this year, something that could give the U.S. some leverage going forward.  With little new news expected, money flow is being monitored closely, and last week we have been suggesting that the funds seem much more interested in covering while sentiment is bearish than adding to their drawn-out short position.  Weekly Crop Progress this afternoon is expected to show soybean harvest at 90% complete, just 3% behind the 5-year average. 

 

Technicals:  This should really be labeled the “technical & psychological” section.  We have heard countless prospective clients over the past week tell us that they are short beans because of the big carryout number; news flash: this isn’t new news.  The market is as efficient as it has every been and is constantly digesting information that hasn’t even hit the wires yet, a big reason why we put a big emphasis on technicals (end rant).  First technical resistance today comes in from 892-893, perhaps the more significant pocket comes in from 900-906 ¼.  This pocket represents the recent highs, the 50-day moving average, the October 15th highs, and the psychologically significant $9.00 handle. 

 

Bias: Neutral

 

Resistance: 892-893**, 900-906 ¼****, 932-935 ¼***

Support: 874-876 ¼**, 864-865 ¾****, 839 ¼-844 ½**

 

 

Wheat (December)

 

Last Week’s Close: December wheat futures finished Friday’s session down 5 ½ cents, putting prices in negative territory by ½ of a cent for the week. Futures traded in a 16 ¼ cent range through the week. Friday’s Commitment of Traders report showed funds bought 5,963 contracts through November 6th, trimming their net short position to 41,965 futures.

 

Fundamentals:  Wheat has been chopping around as it searches for a new fundamental catalyst to give the market its next directional move.  Crop Progress is something that could start to trend and be that catalyst.  Expectations for the weekly Crop Progress report this afternoon is for winter wheat planting to be 90% complete with a crop rating of 52% good/excellent, this would be up 1% from last week.  As with other commodities, we are watching the U.S. dollar extremely closely.  This morning we are seeing new highs on the year, a big headwind for the wheat market.

 

Technicals:  In our weekly weekend wrap up, we mentioned the bulls having a risk/reward advantage near $5.00.  With that said, the bulls must defend that support.  A break and close below could take us back towards the October 25th lows of 485 ½.  On the resistance side of things, our pocket remains intact from 515 ½-519.  A breakout above here will likely spark short covering and provide a big boost to this market. 

 

Bias: Neutral

 

Resistance: 515 ½-519***, 528-531 ¼***

Support: 500***, 485 ½***, 468 ¼-473 ¾****

 

 

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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.