Traders Focus on Yield and Planted Acres Estimates

US officials will head to China on Monday
Traders digest known information while weighing yields and planted acres
Grain futures market update

Grain futures market update

Corn Futures (December)

Yesterday’s Close: December corn futures finished yesterday’s session up 4 cents, trading in a range of 8 ¾ cents. Funds were estimated buyers of 7,000 contracts.

Fundamentals: Corn traded both sides of unchanged in yesterday’s sessions as traders and other market participants try to digest known information while weighing looming question marks (yields and planted acres). We continue to believe that the lingering question marks will provide some sort of a floor in the market. Weather will continue to be an important factor as the crop continues to develop. US officials are headed to China on Monday, this won’t have a direct impact on the dismal demand situation but has provided renewed optimism in the broader grain markets.

Technicals: The market worked towards our significant support pocket, from 418 ¼-420 ½. Overall sentiment has been overwhelmingly bearish since coming off hard last week, but with prices testing the low end of the range the risk/reward favors the bull camp. In yesterday’s report, we listed first resistance as 435 ¼-437, we are testing the upper end of that in the early morning trade. If we get follow-through on the floor open, we could see an extension back towards 447-450.

Bias: Bullish/Neutral

Resistance: 447-450***, 473-475****

Pivot: 435 ¼-437

Support: 418 ¼-420 ½***, 404 ½-406 ¼****

 

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Soybeans Futures (November)

Yesterday’s Close: November soybean futures finished yesterday’s session down 2 ¼ cents, trading in a range of 11 ½ cents. Funds were estimated sellers of 4,000 contracts.

Fundamentals: Soybeans were able to work off the lows yesterday thanks in part to headlines that said US officials will head to China on Monday. This is playing out much like the story of the boy who cried wolf. We aren’t holding our breath for a trade deal but acknowledge that continuing talks is a good thing and a deal will be done at some point, even if that means years from now.

Technicals: The market tested and held the 50-day moving average yesterday, marking higher lows. Higher lows and lower highs have been a bit of a trend and that is starting to form a coiling wedge, this could lead to a bigger directional move. Support and resistance levels remain intact from yesterday’s report. Our bias is Neutral/Bearish.

Bias: Neutral/Bearish

Resistance: 915 ¼**, 921 ¼-924 ¼**, 934 ¼-938 ¾****

Support: 898 ½-900**, 887 ½-891 ¾***, 855 ½-862 ½****

Wheat Futures (September)

Yesterday’s Close: September wheat futures finished yesterday’s session down ¾ of a cent, trading in a range of 10 ¼ cents. Funds were estimated sellers of 1,500 contracts.

Fundamentals: Wheat futures were under pressure early on but found a bid late in the day thanks to headlines regarding US/China trade. This does not have a direct impact on wheat but benefits prices through money flow. That positive money flow has spilled over into the overnight and early morning trade. Ultimately, we see relief rallies as opportunities to sell.

Technicals: The market managed to stabilize in our support pocket yesterday, this coupled with positive money flow in the grain sector has led to a relief rally. First resistance today comes in from 498-502 ½. For clients who have a bearish bias, this would be a spot to consider selling, but you want to be ready willing and able to add from 510-512 ¼.

Bias: Bearish

Resistance: 498-502***, 510-512 ¼***, 516 ¾**

Support:483 ¼-486 ¼***, 473 ¾-475****

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