Corn Futures (December)
Fundamentals: December corn futures continue to leak lower with little bullish news to support the market. Tomorrow’s option expiration is the only thing that looks near term friendly in our eyes. We are surprised that has not yet offered much support, but the thesis remains intact. Yesterday’s weekly ethanol report showed production increased for the eighth consecutive week, 1,033,000 barrels per day. Export sales came in at 788,000 metric tons, up 36% from the previous week and 49% above the 4-week average.
Technicals: The market searched for stops below the bottom end of our support pocket but came up empty and managed to hang on by a thread, into the close. 366-368 ¼ is the pocket the bulls MUST defend. A breakdown below here opens the door to a retest of contract lows, even for the December contract which expires in just over a week. There may be a very short term buy here, from a risk/reward standpoint...Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each day.
Fundamentals: January soybeans broke lower yesterday on bearish headlines around trade with China. The concern doesn’t seem to be over the lack of a deal but a breakdown in communication which could lead to increased tariffs. Export sales this morning came in at 1,516,700 metric tons, 22% higher than last week and 39% above the 4-week average.
Technicals: January soybean futures broke below support; we have defined that as 909 ½-913. This will now be resistance. If the bulls fail to reclaim ground above here, we could see the market melt, taking us back below the psychologically significant $9.00 handle, 894-895 ¾ being the specific target. Below that, there’s not a lot until the mid-870’s.
Chicago Wheat (December)
Fundamentals: Chicago wheat futures have been bucking the trend of lower grain prices, working on their fourth consecutive day of higher closes. Export sales this morning came in at 437,700 metric tons, 83% higher than last week and 29% higher than the 4-week average.
Technicals: Chicago wheat futures have been bumping up into our resistance pocket for the past two sessions and were able to chew through in the early morning trade. 515 ¼-517 ¼ is the pocket to watch on a closing basis. A close above here could extend the rally towards 535-538 ½.....Please sign up for a Free Trial at Blue Line Futures to have our entire technical outlook, actionable bias and proprietary levels emailed to you each day.