Corn Futures (March)
Fundamentals: Yesterday’s crop progress report showed that 89% of the corn harvest is complete, in line with expectations, but well behind the 5-yr. average, 98%. The lagging states Are North Dakota (36%, 5yr avg. 95%), Wisconsin (66%, 5yr avg. 91%), and Michigan (66%, 5yr avg. 89%). All in all, you’re looking at close to 1.25+/- billion bushels left to harvest. Yesterday’s Commitment of Traders report showed funds bought 7,457 contracts, trimming their net short position to 116,072. Weekly export inspections were disappointing, 429,000 metric tons, 58% lower year over year.
Technicals: The market worked higher yesterday but failed to breakout above our resistance pocket from 381 ¼-382 ¾. If the bulls cannot achieve consecutive closes above here, we could see a near term setback. If the bulls can Pac-man through resistance, that would likely spark a round of short-covering, taking us into the mid 390’s. We have been at a neutral bias but like the way things are starting to look. 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 closed lower for their 8th consecutive session on the back of fund selling and negative reports on trade with China. President Trump stated that it may be better if they wait to make a deal after the 2020 election. The overall rhetoric has shifted from the US side of things, it was all positive spins for a year, but they seem to be shifting their strategy to not come across as desperate and put more pressure on China. Yesterday’s crop progress report showed the soybean harvest is all but complete at 96%, 3% behind the 5-year average. Yesterday’s Commitment of Traders report showed funds sold a record 61,393 contracts, putting them net short 42,941. Export inspections came in within expectations, 1,548,000 metric tons.
Technicals: The market broke below our first support pocket near 880, triggering a whoosh towards our more significant 4-star support pocket from 865-869 ½. We like buying this pocket with a tight leash for a short-term relief rally. The keyword is a relief, the bears will be in control until the bulls can reclaim ground above 894-895 ¾. Yesterday’s lower close brought the RSI (relative strength index) down to 18.9, the lowest read since making contract lows back in May.
Previous Session Bias: Bullish/Neutral
Resistance: 894-895 ¾**, 909 ½-913***
Support: 865-869 ½****
Chicago Wheat (March)
Fundamentals: Chicago wheat gave back some ground yesterday, likely on profit-taking from Friday’s big move higher and disappointing export inspections, 247,000 metric tons. Yesterday’s Commitment of Traders report showed funds bought 12,525 contracts, putting them net long 10,475. Some of the recent rally is likely in part to concerns over the Australian crop, which could be 20% lower due to drought, putting production near an 11-year low.
Technicals: The market is coming off the highs and consolidating, a healthy development from a technical standpoint. Bulls will need to defend 529 ¼-534 on a closing basis. A failure to do so could neutralize the chart in the near term. The chart is constructive, but we don’t like Chicago wheat in the mid $5 range, so our bias is neutral.....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.