*US and China are expected to meet this weekend to discuss trade Corn (December)
Fundamentals: Corn futures accelerated to the upside on short covering from funds, concerned that the damage from this week’s storm could potentially mark the top for the lofty USDA production/yield estimates. The majority of the concern comes from Iowa, which got hit hardest. The USDA currently estimates their yield at 202 bushels per acre. The USDA announced a sale of 110,000 metric tons to unknown. Yesterday’s export sales report showed the following: Net sales of 377,200 MT for 2019/2020 were up noticeably from the previous week and up 18 percent from the prior 4-week average. For 2020/2021, net sales of 553,100 MT.
Technicals: The market broke out above 330, opening the door for a run at our pivot pocket, 337 ½-339 ¼. This pocket represents the 50 and 100-day moving average, along with previously important price points. If the Bulls can chew through this pocket and achieve consecutive closes above it, we could see the market fill the gap from July 10th, at 344. Just above that is the psychologically significant 350 handle. As it stands now, it may be a difficult hurdle. We will be looking to reward the market on this rally but will be watching price action and playing it by ear.
Bias: Neutral Previous Session Bias: Neutral
Resistance: 343 ¾-346**** Pivot: 337 ½-339 ¼ Support: 326-330***, 320-322** Soybeans (November)
Fundamentals: Soybean futures rallied hard yesterday, for similar reasons as corn. Funds seem concerned that the damage from this week’s storm could potentially mark the top for the lofty USDA production/yield estimates. The majority of the concern comes from Iowa, which got hit hardest. The USDA currently estimates their yield at 58 bushels per acre. The USDA announced a sale of 197,000 metric tons to China for 2020/2021 and another sale of 202,000 metric tons of beans to “unknown” (likely China) for 2020/2021. Yesterday’s export sales data came in at 570,100 MT for 2019/2020 were up 65 percent from the previous week and 96 percent from the prior 4-week average. For 2020/2021, net sales of 2,839,400 MT were primarily for China (1,705,000 MT), unknown destinations (872,500 MT).
Technicals: The market made a run at the psychologically significant 900 handle and the 200-day moving average but failed to find new buyers to spur another breakout move. We have not seen November soybean futures trade above the 200-day moving average since January 23rd. Significant resistance comes in from 905 ½-911 ½. September options expiration next week may play a role in price action, this will be something to keep an eye on going into next week’s trade.
Bias: Neutral Previous Session Bias: Neutral
Resistance: 905 ½-911 ½**** Pivot: 900 Support: 883-887 ¾***, 866 ¼-873**** Chicago Wheat (September)
Fundamentals: Chicago wheat futures managed to rally on spillover momentum from corn and beans. Weekly export sales came in at 367,900 metric tons (MT) for 2020/2021 were down 39 percent from the previous week and 45 percent from the prior 4-week average.
Technicals: The Bear camp remains in full control as the market continues to struggle to get back above the technical and psychologically significant pocket from 496 ½-500. Consecutive closes above here would neutralize our bearish bias. The new downside objective for the Bear camp (assuming they can defend resistance) comes in at 471, a retest of the contract lows from June 26th.
Bias: Neutral/Bearish Previous Session Bias: Neutral/Bearish
Resistance: 517 ½-523***, 532-535 ½*** Pivot: 496 ½-500 Support: 481**, 471***
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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.