Fundamentals: Corn futures managed to firm up to start the week as market participants were looking for crop conditions to drop. Yesterday afternoon’s crop progress report showed good/excellent ratings at 61%, 1% lower than last week, but in line with expectations. Attention is now shifting towards Friday’s WASDE report, where yield estimates are expected to drop 3.5 bushels, to 178.3 bushels per acre. This puts production estimates near 14.898 billion bushels. New crop ending stocks are expected to come in near 2.451 billion bushels, a decline of .305 billion bushels from last month’s USDA report.
Technicals: Corn futures attempted to breakout above the top end of our pivot pocket, 363 ¼, but failed. We still like leaning on the sell-side against this pocket, but a break and close below would neutralize our bias. If the Bulls were able to achieve a breakout, we could see an extension towards 373-377 ¼. We would not be surprised to see the market linger near our pivot pocket until we get new news from the USDA on Friday.
Previous Session Bias: Bearish
Resistance: 373-377 ¼***
Pivot: 359 ½-363 ¼
Support: 343 ¾-346****, 326-330***
Fundamentals: Soybean futures marked their 11th consecutive session with a higher close, the longest winning streak since March 2008. Yesterday’s crop progress report showed good/excellent ratings at 65%, 1% lower from last week, but 1% better than expectations. Attention is shifting to Friday’s USDA report, out at 11 am CT. Expectations for yield are near 51.8 bushels per acre, a drop of 1.5 from last month’s report. Production estimates are near 4.295 billion bushels. New crop ending stocks estimates are near 465 million bushels.
Technicals: Soybeans are on their longest winning streak since 2008, bringing the RSI (relative strength index) to 82.92. This is considered “extremely overbought”, that does not mean the top is in, but rather suggests that the upside potential/value is likely limited in the near term. Previous resistance now becomes first support, we see that as 968-970.
Previous Session Bias: Bearish/Neutral
Resistance: 980-982 ¾****, 1000**
Support: 950-952**, 923-925 ¼****
Chicago Wheat (December)
Fundamentals: Yesterday’s crop progress report showed winter wheat is 5% planted. The Spring wheat harvest is 82% complete. Production estimates for Friday’s USDA report are expected to be unchanged, which has been the trend for nearly two decades. Ending stocks are estimated to come in near 924 million bushels.
Technicals: December wheat futures pulled back to our first support pocket yesterday, we have had that defined as 540-542 ½. A break and close below this pocket could accelerate the selling and take us back towards 526 ½-530. This pocket represents a key retracement, previously important price points, and the 50 and 100-day moving average.
Previous Session Bias: Bearish/Neutral
Resistance: 568 ½**, 577 ½-581 ¼****
Pivot: 554 ½-557 ½
Support: 540-542 ½**, 526 ½-530***, 518**
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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.