Daily Grain & Cotton Commentary (1.13.20)

Published on: 07:59AM Jan 13, 2020
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Corn (March)

Fundamentals: Friday’s USDA report had the US corn yield coming in at 168.0 bushels/acre, above the average estimate and last months report. The USDA estimates harvested acres to be at 81.482, in line with estimates. Production at 13.692bb was slightly higher than expected. Quarterly stocks were at 11.389bb, lower than estimates and last months report, helping offset the bearishness tied to increased production. Friday’s Commitment of Traders report showed funds bought back 1,569 contracts, trimming their net short position to 80,887.

Technicals: All last week we talked about how the bulls MUST defend 377-380 on a closing basis, which it managed to do. This pocket represents previous contract lows from May, a gap from December 12th, along with other previously important price points. This significant technical support coupled with a neutral USDA report sparked a mild round of short covering, taking us back to our pivot area and 100 day moving average, 385-386 ½. The bulls want to see consecutive closes above here to sleep easy, but the more significant resistance pocket comes in from....For the full report, sign up for your FREE two-week trial!


Soybeans (March)

Fundamentals: Friday’s USDA report was mostly bearish with yield, production, and ending stocks coming in higher than expectations. What helped prop the market up after an initial dip was technical support and optimism around this week signing of the Phase-1 trade deal, which would rachet back tariffs, making it more of a truce than a substantive deal. Friday’s Commitment of Traders report showed funds bought 4,318 contracts, putting them in the black by 1,159 contracts.

Technicals: March soybean futures dipped lower on the release of the report but managed to hold first support and finish the session in positive territory. We listed first support as 933 ¾-937 ¼, this pocket represents several previously important price/volume points over the last month. Going into the report, we were hoping to see a break below here to be able to by March beans in the mid-920’s. We didn’t get that break and don’t see much value in a speculative buy or sell right here, keeping our bias to start the week at Neutral. From the hedging side of things, it would probably be wise to protecting the downside near term....For the full report, sign up for your FREE two-week trial!


Wheat (March)

Fundamentals: Chicago wheat futures were choppy on Friday as market participants digested the latest traunch of information from the USDA. Winter wheat plantings were mostly inline with expectations, 30.804, a 111-year low. Ending stocks were also within the range of expectations. Friday’s Commitment of Traders report showed funds bought 417 contracts, narrowly increasing their net long to 27,687 contracts.

Technicals: The trend of higher lows and higher highs remains intact and a retest of the double top highs from June remains probable. That resistance pocket comes in from 572 ¼-573 ½. Perhaps the market searches for stops above this pocket, but we would look at this as an opportunity to sell on the first test. On the support side of things....For the full report, sign up for your FREE two-week trial!


Kansas City Wheat (March)

Technicals: As with Chicago wheat, the trend of higher lows and higher highs remains intact. $5.00 is psychologically significant, if we can achieve consecutive closes above this pocket, we would look for a swift move towards 509 ¾-513. The longer-term objective for the bull camp would be....For the full report, sign up for your FREE two-week trial!


Cotton (March)

Fundamentals: Cotton futures are extending their run after the USDA cut harvested acres by 710,000. Yields were revised higher which offset some of the bullishness. Friday’s Commitment of Traders report was little changed, showing funds are net long 20,879 contracts.

Technicals: The market is continuing to grind higher. The bulls need to see consecutive closes above 71.15, this would open the door for a run at 72.34-72.80, retracing the breakdown point from early May. On the support side of things, the bulls need to....For the full report, sign up for your FREE two-week trial!

Feel free to contact Oliver with any questions or comments

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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.