Corn Futures (March)
Fundamentals: March corn futures slipped lower yesterday but remain trapped within the range amid time of year that offers a lack of news to break the market out or down. The bear camp had the opportunity to beak the market following Tuesday’s USDA report, but there seemed to be a sellers strike at these levels, an encouraging sign in our opinion. For this reason, we moved our bias to outright Bullish Wednesday. We are going into a long weekend, adding additional risk with the market closed an extra day. Yesterday’s weekly export sales came in at 968,800 metric tons, 22% below last week’s report and 9% below the 4-week average.
Technicals: The market remains range bound, but we are optimistic about prices in the near term. With prices at the low end of the range, we see this as a good risk/reward situation to the buy-side. With that said, there is still some work to do on the charts. First resistance comes in from 384 ¾-387 ¼, consecutive closes above here could spark a bigger rally. The must hold support pocket is 375 ¼-377 ¾. With the shot-clock winding down on the March contract, you may want to consider using the May contract, or going further out than that. 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.
Previous Session Bias: Bullish
Resistance: 392-394 ¼***, 407 ¾-411 ¾****
Pivot: 384 ¾-387 ¼
Support: 375-377 ¾***, 365-365 ¾****
Fundamentals: Soybeans have staged a nice rally this week, taking us within a stones throw of the psychologically significant $9.00 handle. Some of this is likely in anticipation of the Phase-1 agreement officially kicking off tomorrow, the 15th. The concerns around coronavirus are real, but it is very hard to quantify the spillover affects just yet. We are going into a long weekend, adding additional risk with the market closed an extra day. We moved our bias to Bullish/Neutral on Wednesday but will be tightening things up before the close.
Technicals: The market ran up against our technical resistance pocket yesterday, we have defined that as 900-905 ¾. Though we could see a bump above here we think this may be a magnet into next week’s option expiration, there are about 13,000 calls at the $9 strike. Previous resistance now becomes support, that comes in from 888 ¼-890 ½. We are moving our bias back to Neutral.
Chicago Wheat (March)
Technicals: The market managed to hold first support this week, we’ve defined that as 538 ½. The ability to defend this level has led to a consolidation higher, which we will be looking to resell with clients. Lower highs and lower lows have been the trend over the last month, creating a bearish head and shoulder pattern on the chart. Previous support now becomes resistance, we see that as 550-552 ¾. This pocket represents the 50-day moving average, a trendline from the contract lows, and the breakdown point from earlier in the week.