Today's Grain Trade
Nov 16, 2017
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Yesterdays Close: December corn futures closed up one cent yesterday, trading in a narrow two cent range. Funds were estimated to have been buyers of 3,000 contracts.
Fundamentals: We are one week removed from the recent USDA report and the market continues to look for meaningful new news to attract more trading activity but there is not much there. Yesterday’s weekly EIA report showed that ethanol production was down 3,000 barrels per day to 1,54 million barrels. Weekly stocks were increased by 152,000 barrels which puts the total at 21.497 million barrels. Export sales this morning came in at 949,500 metric tons with Japan being the top buyer. This compares with the expected range from 1,250,000-1,700,000 metric tons and last week’s read of 2,364,500 metric tons.
Technicals: The slow bleed lower is not the most ideal scenario for those searching for a bottom. We would much rather see a panic sell and capitulation. 334-335 ½ has been a big level on our radar and remains the near-term target (although just a stone’s throw away now). On the flipside, previous support now becomes resistance, the market needs to get back out above 342 ½-345 ¼ to encourage any sort of friendly price action. The RSI (relative strength index) is showing 34.68 this morning, the general rule of thumb is a reading below 30 indicates oversold.
Resistance: 342 ½-345 ¼**, 355¼***
Support: 334-335 ½***, 323-325 ¼**
Yesterdays close: January soybeans closed 7 ½ cents higher yesterday, trading in a 10-cent range on the day. Funds were estimated buyers of 7,000 contracts during the session.
Fundamentals: Yesterdays NOPA crush report showed October crush at 164.2 million bushels, this was essentially in line with the expectations. Export sales this morning came in at 1,104,800 metric tons, China was the top buyer. This compares to the expected range from 1,100,000-1,500,000 metric tons, and compares to last week’s 1,160,60 metric tons. With harvest all but complete here in the States, the chatter has died down and attention has turned towards South America as the bulls and the bears wrestle with the different weather models and their effects on the prices.
Technicals. The market held the 61.8% Fibonacci well on the first test down at 968 ¼, this will need to hold for bulls to stay in control. A retest of the level could lead to another technical breakdown and accelerated selling pressure from the funds who hold a decent net long position. Think of technical levels like a building and price like the wrecking ball, with each test (hit) it becomes weaker and with enough tests, it will break down. On the resistance side of things, previous support now becomes resistance. The bulls want to reclaim the pocket from 979 ½-984 ¾. A wider gap than we would typically like, but this pocket contains the 50, 100, and 200 day moving average along with the 50% retracement from the June lows to the July highs.
Resistance: 979 ½-984 ¾***, 999 ¼-1004 ¾**, 1014**
Support: 968 ¼****, 957-963 ¼****, 947 ½**
Yesterdays close: December wheat futures closed 6 ¾ cents lower yesterday, trading in a range of 10 ½ cents. Funds were estimated to have been sellers of 5,500 contracts on the day.
Fundamentals: December wheat futures are on the same train as the other grains in the sense that they are searching for new news on the wire but there is just not much there. Export sales this morning came in at 489,300 metric tons with Japan being the top buyer. this compares with the expected range from 330,000-550,000 metric tons and to last week’s blowout number of 781,800 metric tons. The bulls want to see exports rise and come in above expectations in order to get this market going north again. Until we see that, the bears will remain in control.
Technicals: The bears remain in control until the bulls can achieve consecutive closes above technical resistance. That resistance pocket comes in from 434 ¼-437 ¼, this represents the recent highs as well as the 50-day moving average. On the support side of things 416 ¼-418 is the pocket the bulls want to defend, a break and close below opens the door to prices with a 3 handle. Although we have been trading in a sideways range for the past two weeks, our bias remains bearish and rallies are to be sold.
Resistance: 434 ¼-437 ¼**, 443****, 462 ¾**, 478-479****
Support: 416 ¼-418**, 399-402 ¾****, 390-392 ¼**
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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.