Corn Futures (March)
Fundamentals: Corn futures fell yesterday as the risk-off mentality seeped back into the market on renewed fears of coronavirus. Does this have a huge impact on corn? Probably not, but money-flow has shifted within the global markets. After the grain markets closed yesterday, outside markets rallied nearly 2% off the lows, this offered support to the grain markets in last night’s open, but that has begun to breakdown in the early morning trade. Outside markets will likely have a meaningful role in price action in the very near term. It is also the last day of the month, this could also have a minor effect on things too.
Technicals: The market closed the gap from Sunday, but failed to attract new buyers at that point, marking lower highs. There is concern that this could take us to lower lows which is why we moved our bias to outright Neutral in yesterday’s report. 375-377 ¾ is the low end of the recent range, if the bulls cannot defend this pocket on a closing basis, we could see a retest of contract lows soon, 365-365 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.
Fundamentals: March soybean futures broke down yesterday, marking the lowest price since May. Coronavirus fears spread into the broader markets which sparked a renewal in the risk-off mentality, sell first, as questions later. If the outside markets can stabilize and rally, we think that soybeans will be able to follow suit, as seen in the overnight trade. Stocks rallied hard yesterday afternoon, (after grains closed) this led to a firm grain open. Stocks gave back those gains overnight, grains followed. The near-term theme is money-flow.
Technicals: In Wednesday’s report we talked about the Tuesday morning reversal raising a caution flag, this prompted us to put your bias at Neutral in yesterday’s report, after giving the buy-side a chance. The market broke lower yesterday and filled the gap from May 24th this morning, that is 875 ¼. We see this, to 880 as another buying opportunity but need to see the market find its footing. With money-flow leading the way and being a wild-card, consider reducing your position size. The RSI is at 20.50, oversold, but not as oversold as we were in May and December 18 and 11.57 respectively.
Previous Session Bias: Neutral
Resistance: 920-924***, 933 ¾-937 ¼***
Pivot: 899-902 ½
Support: 875-880****, 865-867 ¾**, 841 ½****
Chicago Wheat (March)
Technicals: Chicago wheat futures were in breakdown mode yesterday along with nearly every other market, but wheat bucked the trend into the afternoon and managed to close well off the lows. Our pivot pocket from 557 ¼-559 ½ has been adjusted to 559 ½-562, this pocket represents a key Fibonacci retracement, along with other previously important price points. If the bulls cannot achieve consecutive closes back above this pocket, we would expect to see the bears pounce. Significant support comes in around the low 540’s, this area represents a key retracement, previously important price points, and trend-line support from the September lows, an indicator that we have tested and held in November and December. 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.