Corn Futures (December)
Fundamentals: December corn futures had one of their most constructive sessions this month, the next two sessions should give us an idea of where we stand in the “bottoming process”. Yesterday’s weekly EIA ethanol report showed production at 1.023 million barrels, down from 1.045. These numbers have been on the decline for a month straight, adding an extra headwind to the market. Weekly export sales came in at 119,300 metric tons for old crop, 301,600 mt for new crop. Option expiration is tomorrow, with so many ITM (in the money) put options, this could be supportive.
Technicals: Despite the still bearish chart, yesterday’s session was a silver lining for the bull camp. Prices retreated into our 3-star support pocket from 363 ¾-369 and managed to “rebound” slightly through the afternoon. The potential for a double bottom in a grossly oversold market makes the risk/reward setup friendly to the buy-side. For the first time since the last USDA report we are putting our bias back at Neutral/Bullish.
Previous Session Bias: Neutral
Resistance: 381**, 392 ¾***, 405-407**
Support: 363 ¾-369***, 338 ¾-343**
Soybeans Futures (November)
Fundamentals: Soybean futures managed to gain back in yesterday’s session as reports from the Pro Farmer crop tour continue to trend toward the friendly side (for prices). Final findings will be out tomorrow, we would not be surprised to see this add additional support to the market. Corn, beans, and wheat have all been battling weak technicals and money flow for the last two months, there’s a chance we could start to see that shift, but we will need to see confirmation in the final two sessions of the week. Export sales this morning came in at 25,900 mt of old crop, 792,600 mt of new crop.
Technicals: The market is showing signs of stabilization and is holding higher lows this week, this should be encouraging for the bull camp. 854 ½-860 ½ is the pocket to defend through the remainder of the week. As mentioned in the corn section; The potential for a double bottom in a grossly oversold market makes the risk/reward setup friendly to the buy-side. For the first time in what seems like a lifetime, we are moving our bias to a bullish tilt.
Previous Session Bias: Neutral/Bearish
Resistance: 891 ½-896 ¾**, 921-924***
Support: 854 ½-860 ½****, 839 ¾-843 ¾**, 815 ½****
Wheat Futures (September)
Fundamentals: Wheat futures managed to rebound after making new lows on the move, a positive development for the bull-camp, if there still is one. Our near-term bias has shifted in corn and beans, prompting us to go outright Neutral, from outright Bearish. If you want to be a buyer of wheat, we would suggest looking at the KC contract. Export sales came in at 594,600 mt of old crop, 4,900 mt of new crop.
Technicals: Wheat futures came off yesterday’s lows nicely, thanks to decent strength in the broader grain complex. We are not overly excited about the Chicago contract but do believe there is value in the KC contract. KC is working on a double bottom from 397 ½-400, if the bulls can continue to defend this pocket, we would not be surprised to see a nice relief rally.
Previous Session Bias: Bearish
Resistance: 483 ½-486**, 501 ½-506 ¼****, 525 ¾-531 ½****
Support: 469 ½***, 442-446**, 427 ¼****