Corn Futures (March)
Fundamentals: Yesterday’s USDA report lived up to the expectations, a total snoozer. The USDA left US carryout unchanged at 1.910 billion bushels. The only noticeable change came in an increase in world carryout, 295.5mt to 300.5mt, this came on the back of a 6.7 mb increase of Chinese corn production. Attention will focus on South American weather and crop development, Argentina is said to be 56% planted.
Technicals: If you looked at a chart, you would never guess that there was a USDA report yesterday (even an intraday chart). With the markets little changed, many of our technicals remain intact. Resistance comes in from 381 ¼-382 ¾, the bulls need to see consecutive closes above here to spark a short-covering rally. On the support side of things, the bulls need to defend 373-375, a break and close below here opens the door for a potential retest of contract lows at 365 ¾. 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.
Soybeans Futures (January)
Fundamentals: January soybeans managed to close higher yesterday following a relatively mute USDA report, marking its sixth consecutive higher close. US carryout was left unchanged at 475 million bushels. World carryout was raised to 96.40 mt, the average analyst estimate was 95.46. Trade headlines will continue to have an impact on prices, but traders will also be paying close attention to weather and crop development in South America. Argentina is said to be 53% planted.
Technicals: The market is hovering around the psychologically significant $9.00 handle. We continue to believe this is still just a relief rally and the bulls needed more fuel from yesterday’s report to extend gains, the lack of bullish news could put some near-term pressure on prices. If the market were to break below 894-900, we could see another leg lower. On the resistance side of things, there are several barriers from 909 ½-913, including the 100 and 200-day moving average, a key retracement, and the breakdown point from November 20th.
Previous Session Bias: Neutral/Bearish
Resistance: 909 ½-913***
Support: 889**, 878-880***, 865-869 ½****
Chicago Wheat (March)
Fundamentals: Chicago wheat futures traded both sides before finishing the session near unchanged. US carryout dropped by 40 million bushels to 974mb, the average analyst estimate was for 1.010mb. This offered initial support but the bulls an increase in world stocks was a minor headwind. World stocks came in at 289.50mt, above the average estimate of 286.18mt.
Technicals: The chart is starting to resemble a strand of Christmas lights, with the daily bars going sideways, alternating between red and green for the last 5 (going on 6) sessions. The market is defending technical support well, which remains intact from 515 ¼-518 ¾. A failure here will put the bears in clear control. A close back above 525 ¾-529 ¼ puts the bulls in clear control .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.