Corn, Soybeans, Wheat, and Cotton!

Published on: 07:55AM Oct 18, 2019

Corn (December)

Fundamentals: The market chopped around yesterday thanks to a slow news day. The weekly EIA ethanol report showed production increase 8,000 barrels per day to 971,000 bpd. Export sales this morning came in at 368,600 metric tons. We remain optimistic on prices but really need to see the demand side of the picture brighten up. As harvest starts to ramp up we will start to hear more about production, early on it seems there’s a trend of disappointment (in yields).

Technicals: The market is treading water in our pivot pocket from 390-392 ¾, the bulls want to defend this going into the weekend. A failure could open the door for a leg lower, retesting the bottom end of the recent range from 377-381 ½. Resistance remains intact from 400-402 ½, this pocket is psychologically significant but also represents the 200-day moving average and other previously important price points.

Bias: Bullish

Previous Session Bias: Bullish

Resistance: 400-402 ½***, 412 ¾-417 ¼****

Pivot: 390-392 ¾

Support: 377-381 ½ ****, 363-366***


Soybeans (November)

Fundamentals: The market tried to run higher yesterday but fizzled out into the close. The lack of bullish headlines and harvest has kept a lid on things through the week. Export sales this morning came in at 1,700,000 metric tons. We remain optimistic on prices over the intermediate term as money-flow and technicals remain positive, potentially telling the story of what’s to come (price precedes news).

Technicals: The market failed to breakout of our pivot pocket from 936 ½-938 ¾, this will be the spot to watch again today. If the bulls can achieve consecutive closes above here we would expect to see another leg lower. A continuing failure could take us back to the low end of the recent range, the 920 area.

Bias: Bullish/Neutral

Previous Session Bias: Bullish/Neutral

Resistance: 948-950****

Pivot: 936 ½-938 ¾

Support: 920-924**, 899-906 ¾ ****, 879 ½-882 ¾***


Chicago Wheat (December)

Fundamentals: Chicago wheat futures broke out above technical resistance which sparked a round of short covering. The softening dollar has been helping the grain sector, wheat is one that generally see’s a higher correlation to the dollar. We have been optimistic on wheat (more so on the KC) but we are getting to a point where we may take a breather. Export sales this morning came in at 395,100 metric tons.

Technicals: The technicals have been extremely constructive over the last month and that remains the case this morning. With that said, we are nearing overbought and approaching our 4-star resistance pocket from 525 ¾-531 ½. If you had bought support from 500-506 ¼ earlier in the week, this is a spot to consider reducing exposure. If you’re bearish the market, this is the spot to consider selling.

Bias: Neutral

Previous Session Bias: Neutral/Bullish

Resistance: 525 ¾-531 ½****

Pivot: 515 ¾**

Support: 500-506 ¼****, 483-486 ¾***, 476 ¼****


Kansas City Wheat (December)

Technicals: Kansas City wheat has reached our 4-star resistance pocket from 428-432 ¾, if you were long the market this is the spot to consider clearing the deck at, or at least reducing. If you’re bearish, this is the spot to look at selling. This pocket represents a full retracement of the August 12th USDA report, there is also a key retracement and 100 day moving average just above here.

Bias: Neutral/Bullish

Previous Session Bias: Bullish

Resistance: 428-432 ¾****, 437-442**

Support: 415 ½-420**, 397-400***, 380*


Cotton (December)

Fundamentals: Cotton futures continued to rally yesterday as concerns over production and hopes of improved demand helped to support prices. Export sales came in at 606,500, up 36% from the 4-week average. Overall money-flow in the ag sector has been extremely friendly over the last month and we are expecting that to continue.

Technicals: The market has rallied into our 4-star resistance pocket, we have defined this as 65.00-65.85. If you were long from support earlier in the week, this would be the spot to consider reducing long exposure ahead of the weekend. If the bulls can achieve consecutive closes above resistance, it could open the door for another strong push higher.

Bias: Neutral/Bullish

Previous Session Bias: Bullish

Resistance: 65.00-65.85****, 68.35-68.60***

Support: 61.72-62.50****, 59.58-60.79***, 56.59-57.55****


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