Fundamentals: There is a lot of hype heading into today’s USDA report, will it live up to expectations? TBD. Typically this is not a huge report, but we have seen elevated volatility levels and outside participation find its way into grain markets, which should keep things interesting. Ending stocks have been the hot topic and will be the big-ticket item today, those estimates range from 1.108-1.502 billion bushels. This compares to the 1.552 we saw in January. We are leaning towards the low end of that range. Regardless of what the USDA report says, the market reaction will arguably be more important because it will give us a better idea of what the market has been pricing in recently.
Technicals: In yesterday’s report we said we would not be surprised to see continued consolidation ahead of the USDA report; that could not have been more wrong. The market broke out above the top end of the recent range and never looked back. That momentum spilled into the overnight trade with new contract highs being made. There is not a lot of meaningful technical resistance up here, but $6.00 is the next psychologically significant level, which keeps getting closer and closer.
Previous Session Bias: Neutral
Resistance: 570 ¾-575*, 600*
Support: 545-551**, 536 ½-541 ½***
Fundamentals: Today’s USDA report will be the first focus today, the second will be the markets reaction to the data. Ending stocks will be a big focus, analyst estimates range from 102-140 million bushels, the average estimate is 119 million bushels. This compares to the 140 million bushels we saw in January.
Techncials: March soybean futures traded above our first resistance pocket which has opened the door for an extension towards our next pocket, 1394 ¾-1400. A break and close above this pocket likely takes us to retest the contract highs, 1436 ½.
Previous Session Bias: Neutral
Resistance: 1394 ¾-1400****, 1434 ½-1436 ½**
Pivot: 1385-1388 ¾
Support: 1333 ½-1335 ½***, 1292-1301****, 1280 ½**
Chicago Wheat (March)
Techncials: Chicago wheat futures followed corn and beans higher yesterday, trading into our pivot pocket, which we had listed as 656 ½-659. In yesterday’s report we talked about moving our bias to outright Neutral if we broke out above the pivot. So far, the pivot pocket has held.
Previous Session Bias: Neutral/Bearish
Resistance: 674 ¾-679**, 693-700 ½*
Pivot: 656 ½-659
Support: 624-628 ¾***, 614-617 ½**
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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.