Fundamentals: December corn futures gave the background for Thursday and Friday as the beginning of harvest starts to trigger some long liquidation. Yesterday’s Crop Progress report showed the U.S. corn crop is 8% harvested, behind expectations but too early to be concerned. For those of you still keeping track of good/excellent conditions, those came in at 61%, this was 1% better than last week and 2% better than expectations. Weekly export inspections came in at 755,000 metric tons, within the range of expectations.
Technicals: Yesterday’s pullback drops the RSI (relative strength index) down to 61.10, below the threshold of what is universally considered “overbought”. Previous resistance now represents support, we see that coming in from 359 ½-363 ¼. This pocket represents previously important price points, a key retracement, and the 200-day moving average. A failure to hold this level would neutralize the bullish chart developments and potentially trigger another wave of long liquidation.
Previous Session Bias: Bearish/Neutral
Resistance: 377 ¼-379 ½***, 385-386 ¾****
Support: 359 ½-363 ¼***, 343 ¾-346****
Fundamentals: November soybeans saw their first meaningful pullback since the beginning of the rally, a month, and a half ago. Much of the pressure came on the back of long liquidation as harvest starts to pick up steam. Yesterday’s Crop Progress report showed U.S. harvest is 6% complete, on pace with the historical average. Good/excellent ratings came in at 63%, unchanged from last week. The USDA did announce another flash-sale yesterday. 132,000 metric tons to China, 132,000 metric tons to Pakistan, and 171,000 metric tons to Unknown. That is roughly 16 million bushels. Export inspections came in at 1,311,000 metric tons, within the range of expectations.
Technicals: Yesterday’s pullback has brought the RSI (relative strength index) down to 73.78, still a reading that suggests we are in “overbought” territory. Our pivot pocket was tested and held in the overnight session; we had defined that in yesterday’s report as 1013 ¾-1018 ¼. A break and close below this pocket could take us back towards 995-1000, a pocket that is technically and psychologically significant.
Previous Session Bias: Bearish
Resistance: 1046 ¾-1050***
Pivot: 1013 ¾-1018 ¼
Support: 995-1000 ¾****, 980-982 ¾***, 950-952**
Chicago Wheat (December)
Fundamentals: Yesterday’s export inspections came in at 470,000 metric tons, towards the low end of expectations. Yesterday’s Crop Progress report showed winter wheat is 20% planted, on pace with the historical average. Spring wheat is 96% harvested, on pace with historical averages. The US Dollar surged yesterday and is threatening to break out above 94, this could open the door for an extension towards 96. This would likely make it difficult for wheat to hold a meaningful rally.
Technicals: Yesterday’s pullback erased all of Friday’s gains and then some, testing and holding our first technical support pocket. We have defe4ind that as 554 ½-557 ½. A break and close below this pocket could trigger another leg lower and take us back to 530-542 ½. This pocket represents previously important price points, a key retracement, and the 200-day moving average. Just below this pocket is trendline support and the 50-day moving average, at 536.
Previous Session Bias: Neutral/Bearish
Resistance: 577 ½-581 ¼****, 599 ½-601 ¾****
Pivot: 568 ½
Support: 554 ½-557 ½***, 540-542 ½**, 526 ½-530***
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Blue Line Futures
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.