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USDA Day!

Published on: 12:47PM Jun 29, 2018

(above is our weekly "2 Minute Drill" 6.28.18) 

 

CORN (December)

 

Yesterday’s Close:  Corn futures finished yesterday’s session down 7 cents, trading in a range of 7 ½ cents.  Funds were estimated sellers of 13,000 contracts.

 

Fundamentals:  Today is the day!  We will get new news from the USDA at 11am cst, regarding planted acres and quarterly stocks. 

 

Corn Acres

Range of Estimates: 85.5-89.4 million acres

Average Estimate: 88.4 million acres

March Report: 88.0 million acres

 

Quarterly Stocks

Range of Estimates: 5.004-5.500 billion bushels

Average Estimate: 5.276 billion bushels

March Report: 8.888 billion bushels

 

Once we get this report behind us, attention will turn right back towards weather and trade.

 

Technicals:  Yesterday’s selloff into the close was gut wrenching for the bulls left in this market.  Though we are stabilizing in the overnight and early morning trade, we would not be surprised to see the market soften, shaking out the weak longs.  The chart is a technical graveyard, and the bulls have A LOT of work to do before they can begin feeling comfortable.  A conviction close back above 376 ¼-379 ¼ would be one small step for bulls, one giant leap in repairing the chart.

 

Bias: Neutral

 

Resistance: 376 ¼-379 ¼****, 387 ¾**, 397 ½-399 ¼****

Support: 359-360 ½****, 345 ½-350****

 

SOYBEANS (November)

 

Yesterday’s Close:  November soybean futures finished yesterday’s session down 4 ¾ cents, trading in a range of 10 ½ cents.  Funds were estimated sellers of 5,000 contracts on the session.

 

Fundamentals:  Bullish market participants are hoping for a repeat of last year’s report where we saw beans rally $1.05 ¼ in the 12 sessions following the report.

 

Soybean Acres

Range of Estimates: 89.1-90.6 million acres

Average Estimate: 89.7 million acres

March Report: 89 million acres

 

Quarterly Stocks

Range of Estimates: .965-1.305 billion bushels

Average Estimate: 1.204 billion bushels

March Report: 2.107 billion bushels

 

Once the market digests today’s numbers, attention will turn back to weather and trade talks with China.  We are expecting to hear something more concrete within the next week regarding trade.  There have been rumors of an outside chance that soybeans may be exempt from tariffs.  Take it with a grain of salt, the market is not giving the rumor any credit.  

 

Technicals:  This is one of the uglier charts out there, there’s no doubt about it.  The inability to garner additional short covering after last Friday’s close was a big caution flag that has prompted a buyers strike this week.  The market remains in oversold territory with an RSI (relative strength index) of 22.35.  We are expecting a volatile trade on the release of the report and would not count out the possibility of a stop hunt below the June 19th lows of 864 ½.  Bulls need to reclaim the $9.00 handle from a psychological perspective, but the more significant pocket comes in from 921 ¾-923 ½.  If the bulls can achieve a close above this pocket in the next week, we would expect that to spur additional short covering.

 

Bias: Neutral

 

Resistance:  897 ¾-901 ¾***, 921 ¾-923 ½****, 935-939 ½***

Support:  882 ½**, 857-864****, 844 ¼**, 825****

 

WHEAT (September)

 

Yesterday’s Close:  September wheat futures finished yesterday’s session down 5 cents, trading in a range of 10 cents on the day.  Funds were estimated sellers of 4,000 contracts.

 

Fundamentals:  All eyes will be on this mornings USDA report, out at 11 am cst.  We will also be watching the reaction of corn and beans as there could be some spillover price action.

 

Wheat Acres

Range of Estimates: 46.7-47.7 million acres

Average Estimate: 47.2 million acres

March Report: 47.3 million acres

 

Quarterly Stocks

Range of Estimates: 1.042-1.200 billion bushels

Average Estimate: 1.101 billion bushels

March Report: 1.494 billion bushels

 

Technicals:  The market is consolidating near the low end of the range as traders wait for new news to give us a technical breakout or break down.  Our support pocket from 175 ¾-480 remains intact, a close below could open the flood gates for a swift move lower, our next support pocket comes in at 450 ½-454 ¾.  On the resistance side of things, the bulls want to reclaim ground above 496 ¼-500 to encourage another move higher.  This pocket represents a key Fibonacci retracement and the 200 day moving average. 

 

Bias: Neutral

 

Resistance: 496 ¼-500***, 510 ½-513 ½****, 523***

Support: 475 ¾-480***, 450 ½-454 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.

 

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