Grain markets, where is the top?

Published on: 08:35AM Sep 14, 2020

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Corn (December)

Fundamentals: Corn futures managed to rally hard in the back half of last week’s trade as market participants continue to see some value in prices, and others just have a case of FOMO (fear of missing out). Weekly crop progress will be out after today’s close, expectations are for good/excellent conditions to drop another 1%, to 61%. The 5-year average is 63%, good/excellent. Friday’s Commitment of Traders report showed funds bought 14,900 contracts through September 8th, extending their newly found long position to 33,494. It is estimated that funds added another 23,500 contracts from Wednesday to Friday.

Technicals: Corn futures have continued to grind higher, mounting a 70+ cent rally from the contract lows, just six weeks ago. That has brought the RSI (relative strength index) to 72.99, the most overbought this contract (Dec. 2020) has ever been. Our next resistance pocket remains intact from 373-377 ¼. This pocket represents Support in February and the breakdown point from March, as well as the 50% retracement (middle of the range) from contract highs to contract lows. Previous resistance now becomes first support, we see that as............Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed each morning.

 

Soybeans (November)

Fundamentals: Soybeans have continued to defy gravity, bursting above the psychologically significant $10.00 handle in the overnight session. This afternoon’s crop progress report is expected to show good/excellent conditions dropping another 1%, to 64%. This is still 1% better than the five-year average. Friday’s Commitment of Traders report showed funds bought 11,300 contracts through September 8th, extending their growing net long position to 173,907 contracts. It is estimated that funds bought another 21,500 contracts from Wednesday through Friday.

Technicals: Soybeans continued to drift deeper into overbought territory, with the RSI (relative strength index) reading 85.92, the highest reading for this contract (Nov. 2020). Though we have been wrong on the market the last few sessions, it does not change our opinion that producers should be taking advantage of this rally and reducing risk via futures, options, or a combination. Previous resistance now becomes support, that does not come in until.............Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed each morning.

 

Chicago Wheat (December)

Fundamentals: Friday’s Commitment of Traders report showed funds are net-long 23,175 contracts, through September 8th. It is estimated that funds sold 1,000 contracts from Wednesday through Friday. This afternoon’s crop progress report is expected to show spring wheat harvest near 86% complete.

Technicals: Wheat futures tried to rally in the back half of last week's trade but failed to hold that momentum through Thursday’s close. That failure led to some long liquidation on Friday, taking us to our first support pocket, 540-542 ½. This pocket represents a key retracement, previously important price points, and the 200-day moving average. A break and close below this pocket could accelerate the selling and take us back towards 526 ½-530. The first resistance today comes in the form..........Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias, and proprietary levels emailed each morning.

 

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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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