Yesterday's close: Wheat futures finished yesterday’s session down 3 ¾ cents, trading in a range of 5 ¼ on the day. Funds were estimated sellers of 3,500 contracts.
Fundamentals: Wheat futures are finding support this morning on the back of a weaker U.S. dollar. If the USD continues to fall, this could help the prospects of better exports. Exports have been a lagging catalyst which has kept a lid on the market. If we start to see a trend of better than expected exports, you can imagine that funds would start to cover some of their large short positions. Export sales will be released on Friday due to the government shut down to start the week.
Technicals: March wheat futures are finding strength this morning thanks in large part to the dollar getting taken to the woodshed after comments from Treasury Secretary Steve Mnuchin. Though this may have temporarily stopped the bleeding, the bears remain in control. First technical resistance comes in from 428 ¾-430. If the bulls can not chew through and close above technical resistance with conviction, we expect to see the market work towards the bottom end of the recent range which comes in from 410 ½-413 ¼.
Resistance: 428 ¾-430**, 437**, 443-448 ¼ ****
Support: 410 ½-413 ¼***, 399-402 ¾****
Yesterday's close (Tuesday, Jan. 24): March corn futures finished yesterday’s session down ½ of a cent, trading in a range of 2 ½ cents. Funds were estimated sellers of 6,000 contracts for the day.
Fundamentals: Informa Economics released their updated estimates for 2018 U.S. plantings, they have it pegged at 89.187 million acres, this is down from their previous estimate of 89.675 million acres. Weather in South America continues to be important as it could have implications on near to intermediate term price action. The hot and dry weather has been becoming more of a concern in Argentina with the possibility of yield loss.
The market doesn’t seem to be putting any premium on the market, but Fridays February options expiration could be the catalyst keeping the market in check. Looking at open interest, 350 looks to be the magnet as of right now. There are about 60,000 total open calls and open puts at 350 and a nickel on each side. The weaker U.S. dollar is certainly supportive in the overnight and early morning session on the back of comments from Treasury Secretary Steve Mnuchin at the World Economic Forum in Davos.
Technicals: The overnight and early morning price action is encouraging, but expectations should once again be tempered as we approach the top end of the trading range from 354-355, above that there is additional resistance from 358 360 ½. If the bulls can achieve a conviction close above these levels, then the funds have a green light to cover some of their big short positions; until then the bears remain in control. If the bears can defend technical resistance, we expect to see the market retreat and slide towards the bottom end of the range which we have defined as 345-346 ½.
Resistance: 354-355**, 358-360 ½****, 366 ½-369 ¼****
Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**
Yesterday's close: March soybean futures finished yesterdays session up 2 ½ cents, trading in a range of 9 ¼ cents. Funds were estimated buyers of 3,000 contracts.
Fundamentals: Informa Economics released their updated estimates for U.S. plantings in 2018, they have lowered plantings from 91.367 million acres to 91.197 million acres. Weather developments in South America continue to be the headline driver in the market. Hot and dry weather in Argentina is the primary focus as there could be the potential for yield loss. Weather in Brazil seems to be more favorable at this point in time. Soybean Meal has also been providing some support to the market, if we see a correction in the market, that could put pressure on beans.
Technicals: Soybean futures looked like they were going to roll over yesterday afternoon but managed to find support at the 200-day moving average. The inability to breakdown led to additional short covering from the funds. The overnight session has yielded similar results with the market trading lower but finding support at the same spot. The market is now near unchanged as we await the floor open for more volume to give us more direction. Key technical resistance remains at 986 ½- 989. This pocket represents the 100-day moving average along with the recent highs and the 50% retracement from the June lows to July highs. The fact that the market is knocking at the door for the last three sessions lends hands to another leg higher on a close above resistance. The next significant resistance doesn’t come in until 999-1004.
Resistance: 986 ½-989***, 999-1004**, 1020 ¼-1027****
Support: 979 ¼**, 971 ¾ ***, 961 ¼-963 ¼**, 950-952 ¼***