Corn Futures (March)
Breaking: Outside markets sold off on Friday, pricing in the uncertainty that a weekend can hold. Chinese markets re-opened after being on holiday, many stocks limit down with the broader index down as much as 9% on the open. They put a temporary ban on short-selling and injected $173 billion in liquidity. US markets have been mostly firm overnight, indicating that a fair amount of pessimism may already be priced in. US markets are holding firm in the early morning trade, a sigh of relief for most. Today is caucus day for Iowans, the potential outcome of this may have ripple affects in the broader markets.
Fundamentals: Corn futures managed to stabilize on Friday, despite outside markets selling off into the uncertainty of the weekend. Corn is softer in the early morning trade, some of this likely on the back of spillover from weakness in wheat futures. Friday’s Commitment of Traders report showed funds bought 38,327 contracts through January 28th, trimming their net short position to 29,476.
Technicals: The market managed to defend the low end of technical support last week, but the bulls will need to see prices rally, not just defend. That support pocket remains intact from 375-377 ¾, a break and close below here and we would expect to see contract lows tested, 365-365 ¾. On the resistance side of things, the bulls need to see consecutive closes above 384 ¾-387 ¼ to encourage more excitement on the buy-side. We want to be more optimistic, but the chart does not warrant it, this puts our bias at outright Neutral to start the week. ... 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: Soybeans felt the heat into Friday’s close as coronavirus uncertainty and fears led to a risk-off trade ahead of the weekend. Not a lot of new news over the weekend has led us to a choppy overnight trade. Sure, there are headlines that show number of cases and death tolls has increased, this is one way the Media sensationalizes data, those are statistics that cannot decrease. There has been just one death outside of China and no new countries that it has spread to over the weekend, both silver linings. Friday’s Commitment of Traders report showed funds sold 37,210 contracts, putting them net short 50,955.
Technicals: March soybeans broke below critical support in the back half of last week’s trade, we have defined that as 875-880, this will now act as resistance in this week’s trade. If the bulls can achieve a close back above this pocket, we could see a relief rally ensue. The keyword is a 'relief', the bears are in total control of the chart.
Previous Session Bias: Neutral/Bullish
Resistance: 899-902 ½***, 920-924***, 933 ¾-937 ¼***
Support: 865-867 ¾**, 841 ½****
Chicago Wheat (March)
Technicals: March wheat futures rolled over last week as high prices prevent us to be competitive in the global market. That weakness has spilled over into the overnight/early morning trade, taking us down to 4-star support. 542-545 ¼ is the pocket we have had in our daily reports, this pocket represents the 50-day moving average, previously important price points, a key retracement, and trendline support from the contract lows. If you’ve been short, this is an area to reduce exposure. We have had an outright Bearish bias but are moving that to Bearish/Neutral to start this week’s trade.
Previous Session Bias: Bearish/Neutral
Resistance: 573 ½-578 ¾***, 598-601 ¾***
Pivot: 559 ½-562
Support: 542-545 ¼****, 525-528***