Grain Futures Can't Find Bullish Catalyst In Recent USDA Report

We see support in Corn futures at 365
USDA report fell flat and and prompted shorts to get back in at better prices
Chicago wheat in the mid $5 range and would rather be sellers on rallies
Grain futures market update

Grain futures market update

Corn Futures (March)
 

Fundamentals: Corn futures broke lower yesterday after failing to find a bullish fundamental catalyst in this week’s USDA report. Export sales this morning came in at 873,500 metric tons, 60% better than last week and 28% better than the 4-week average. This needs to become the new norm for the bulls to stage a rally.

Technicals: The market broke and closed below technical support yesterday, we have defined that as 373-375, this will be first resistance for the remainder of the week. If the bulls fail to regain ground above here, we could see a retest of the September contract lows at 365 ¾. At that point, we would like to be buyers with the expectations that we see a technical double bottom and then demand shift by the turn of the year. 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 (March)

Fundamentals: January soybeans retreated yesterday once the floor opened. In yesterday’s report, we talked about the recent rally being a relief and the bull camp needing to see friendly news to feed the rally. The USDA report fell flat and that has prompted shorts to get back in at better prices. Export sales this morning came in at 1,050,100 metric tons, 54% better than last week but 17% lower than the 4-week average. December 15th tariffs are fast approaching, but we see the deadline being Friday. If these are kicked down the road, we would expect to see it done before the weekend, that way the outside markets will rally and there will be good press over the weekend. If we stick with the tariffs, it makes more sense to announce that over the weekend where the market will have more time to digest information.

Technicals: As noted earlier in the week, we believe the recent rally was primarily relief and the bears remain in the driver’s seat, looking at the last two months. Yesterday, the market retreated towards the low end of our pivot pocket, we have defined that as 894-900. If the bulls fail to defend this pocket, we could see the market press lower, the next objective being 878-880.

 

Chicago Wheat (March)

Fundamentals: Chicago wheat futures broke lower yesterday while the KC contract managed to hold ground. We continue to weary of Chicago wheat in the mid $5 range and would rather be sellers on rallies. If you want to be long wheat, we think Kansas City is a better option. Export sales this morning came in at 502,700 metric tons, 33% above the 4-week average.

Technicals: The market worked lower yesterday, coming into our support pocket, 515 ¼-518 ¾. This is a MUST hold area for the bull camp, a failure here would likely lead to accelerated selling, taking us closer to the technically and psychologically significant $5.00 handle. On the resistance side of things, the bulls need to reclaim ground back above 525 ¾-529 ¼, a pocket that is becoming more and more out of reach. 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.

 

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