Grain & Cotton Express

Corn (March)

Fundamentals: Export sales yesterday morning came in at 1,247,800 metric tons, up 1% from last week and 57% above the 4-week average. There is little new news, our focus remains on technicals and money-flow.

Technicals: We have been trading sideways all week, leaving many of our technical levels unchanged. We are at the bottom end of the range, which is generally a good time to dabble on the buy-side, but the fact that we marked lower highs the last two weeks is a caution flag. A break and close below 375-377 ¾ would mark lower lows, opening the door for a drop towards contract lows at 365 ¾. The bears have the advantage until the bulls can achieve consecutive closes back above 387-388 ¼.

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 392-394 ¼***, 407 ¾-411 ¾****

Pivot: 384 ¾-387 ¼

Support: 375-377 ¾***, 365-365 ¾****

Soybeans (March)

Fundamentals: Export sales yesterday morning came in at 703,800 metric tons, 76% over last week and 29% above the 4-week average. Tariffs on soybeans will be trimmed by 2.5%, to 27.5%, starting February 14th; nothing to right home about, but a step in the right direction. The spread of coronavirus outside of China seems fairly contained, data on the virus from within China is a different story and seems sketchy at best, which is worrisome. Cutting off travel, building a 10,000-person hospital in two weeks, etc. is not something you do for the common flu.

Techncials: Soybeans have been stabilizing in our pivot pocket from 875-880, this is the low end of the range from August, September, and December. The relief rally we have seen from the recent lows is rather pathetic, considering we saw prices decline nearly 90 cents in January (high to low). The market has challenged resistance from 88 ¼-890 ½, the breakdown point from January 30th, but has failed to hold those intraday rally attempts into the close, creating tails on the chart. The relief and consolidation is starting to look like a bear flag, so bulls should tread lightly here.

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 888 ¼-890 ½**, 899-902 ½***, 920-924***

Pivot: 875-880****

Support: 865-867 ¾**, 841 ½****

Chicago Wheat (March)

Technicals: We believe there is a great risk/reward scenario here, so long as the bears can defend 563 ¾-566 on a closing basis. This pocket contains what would be the right shoulder of a bearish head and shoulders formation. The market has been finding support between the 50-day moving average and trendline support (from the contract lows), that comes in from 548-551, today. A break and close below could spark long liquidation from funds and accelerate the selling pressure.

Bias: Bearish

Previous Session Bias: Bearish/Neutral

Resistance: 563 ¾-566****, 575 ½-578 ¾***, 598-601 ¾***

Support: 548-551***, 538 ½**, 520-525****

Kansas City Wheat (March)

Technicals: Kansas City wheat futures have had a relief and consolidation trade this week, potentially setting up for a bear flag. Resistance into the weekend comes in from 474 ¾-477, the bears have a clear-cut advantage until we see consecutive closes above this pocket. On the support side of things, the market has been holding the 50-day moving average, that comes in at 467. A conviction close blow could take us back into the mid 450’s.

Bias: Neutral/Bearish

Previous Session Bias: Neutral

Resistance: 474 ¾-477****, 488 ½-490 ½**, 498-500**

Pivot: 467

Support: 453 ¾-458 ¾***, 435 ¼-437 ½**

Cotton (March)

Technicals: The market failed to find meaningful traction above our pivot pocket, 67.80-68.00. We continue to believe the bears have the technical advantage until we can see consecutive closes above this pocket. If the bears can defend resistance, we would look for a move towards 63.70-64.02 soon.

Bias: Neutral/Bearish

Previous Session Bias: Neutral/Bearish

Resistance: 69.00**, 70.92**, 71.96**

Pivot: 67.80-68.00

Support: 63.70-64.02***

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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.

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