Corn Futures (March)
Fundamentals: Yesterday’s weekly Crop Progress report showed that corn harvest is 84% complete, 1% behind expectations and 11% behind the 5-year average. This is the third slowest rate since data has been recorded, slower years were 1985 (83%) and 1992 (71%). Last week the USDA said that there were two sales to “Unknown”, one for 132,000 metric tons and one for 191,000 metric tons. The USDA came out yesterday and said that these were actually soybean sales. This is just another error from the USDA in a recent string of delayed reporting and misreporting; completely unacceptable. Weekly export inspections came in at 605,000 metric tons, within the range of estimates but still 57% lower, year over year.
Technicals: The market bumped up to our resistance pocket yesterday but was unable to attract buyers to stage momentum above it, keeping it intact. We’ve defined that resistance pocket as 381 ¼-382 ¾. A close above here could spark a round of short covering from the funds with the next resistance coming in closer to 390. On the support side of things, 375 is the line in the sand that the bulls must defend on a closing basis, this acted as support in August, before breaking to contract lows. It then acted as support again in September, after rallying off contract lows. A break and close below....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: Yesterday’s weekly Crop Progress report showed that soybean harvest is 94% complete, 1% behind expectations and just 3% behind the 5-year average. Weekly export inspections came in at 1,943,000 metric tons, above the top end of the range. Year over year, weekly inspections are up 18%. Last week the USDA announced two separate sales of corn to unknown destinations, the USDA came out yesterday and noted those were actually soybean sales of 132,000 mt and 191,000 mt. Some are hopeful that we can get a Phase 1 trade deal before the end of the year, but it seems like a lot of hot air considering nobody can say what a Phase 1 deal would include.
Technicals: The bearish head and shoulders pattern continue to play out, taking prices to their lowest levels in two and a half months. 894-895 ¾ was support, that now becomes more of a pivot pocket for us. If the bulls cannot reclaim ground above here, we could see the selling pick up, taking us into the mid 870’s. The RSI is reading 25.8 this morning, the most oversold since making contract lows in the first half of May. We like the fundamental backdrop but as mentioned multiple times over the last three weeks; the chart is UGLY. When we have conflicting fundamental and technical backdrops, we have our bias at Neutral.
Previous Session Bias: Neutral
Resistance: 909 ½-913***, 928 ½-930 ¼**, 940-941 ½***
Support: 894-895 ¾**, 879-882**, 865-869 ½****
Chicago Wheat (March)
Fundamentals: Chicago wheat was the leader yesterday, marching higher on the back of winter weather concerns here in the states along with dryer conditions in the Black Sea, Argentina and Australia. Did that really warrant that big of a move, probably not. Yesterday’s weekly export inspections came in at 421,000 metric tons, within the range of expectations and up 22% year over year. Yesterday’s Crop Progress report showed winter wheat conditions at 52% good/excellent, in line with expectations, 3% lower than last year’s rating.
Technicals: The market shot through resistance from 525 ¾-529 ¼ and made a run at our next pocket near 538, which represents the highs from last month. We don’t mind the short side of Chicago wheat at these prices, but the bears want to see resistance defended.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.