Corn Futures (December)
Fundamentals: Last week’s export sales were the highlight of the week, but the bulls need to see this become a trend and not just a flash in the pan. Outside of that, there has been little new news on the wire, which keeps our focus on money flow and technicals, both of which have been firming up over the last two weeks. Friday’s Commitment of Traders report showed funds holding a net short position of 170,626 contracts, an increase of 34,227.
Techncials: Consolidation has been the theme over the last week. First resistance remains intact from 377-381, this pocket represents a key retracement and the top of the range after breaking down last month. If the bulls can achieve consecutive closes above here, we could see prices march towards the gap at 392 ¾. On the support side of things, the bulls need to defend 363-366. A break and close below here would neutralize our Bullish bias.
Previous Session Bias: Bullish
Resistance: 377-381**, 392 ¾-394****, 405-407**
Support: 363-366***, 350-352 ¼***, 338 ¾-343**
Soybeans Futures (November)
Fundamentals: November soybean futures broke down on Friday on fears that the U.S. and China trade talks broke down. It was reported that China canceled its U.S. farm visits, but new reporting suggests the cancellation came from the U.S. side. Even if the cancellation was from China, the market overreacted. Did you really think the farm visit was going to have a dramatic impact on inking a deal anytime soon? As with corn, export sales were good last week but we need to see this become a trend, not just a one-off. Friday’s Commitment of Traders report showed funds reduced nearly half of their net short position, leaving them net short 48,181 contracts.
Technicals: The market worked lower Friday on the back of another overblown trade headline. The 50 and 100 day moving average were tested and are holding this morning. A break and close below here would neutralize our Bullish bias. If this positive momentum can carry over into the floor open, we could see an extension towards 913-915 at some point this week. This pocket represents the 200-day moving average and the 50% retracement (middle of the range) from contract highs to contract lows.
Previous Session Bias: Bullish
Resistance: 900** 914 ¾-915 ½****, 924**, 936 ½**
Pivot: 891 ¾
Support: 879 ½-882 ¾***, 869-871**, 850-852 ½****
Wheat Futures (December)
Fundamentals: Chicago wheat has been holding well as the broader grain complex continues to firm up. Minneapolis wheat has been the leader and could be what the Chicago and KC contract need to continue to work higher. With little new news, we will continue to focus on technicals and money flow. Friday’s Commitment of Traders report showed funds short 12,577 contracts of Chicago wheat and 37,571 contracts of KC.
Technicals: The market was range-bound last week but looks poised to try and work higher in the intermediate-term. The first support remains intact at 480. The bulls need to take out 493-500 to spark a bigger rally. The chart is constructive, but we continue to favor the Kansas City contract.
Previous Session Bias: Neutral/Bullish
Resistance: 493-500****, 525 ¾-531 ½****
Support: 480**, 469 ½-470**, 442-446**, 427 ¼****