• Oliver Sloup

Grain Express

Corn (December)

Fundamentals: Corn futures jolted higher yesterday, following the biggest surprise in November ending stocks over the last 21 years. The USDA had ending stocks a 1.702, the average analyst estimate was 2.033, the last USDA report was 2.167. This was a surprise to some, but as mentioned in yesterday’s tech talk, this is something we wrote about multiple times in our daily Grain Express over the last month. On October 16th we wrote: “Corn futures continue to rally as market participants continue to place bets that the carryout number is less than what the USDA has most recently reported, 2.167 billion bushels. Talking with other analysts, it is being assumed the market is pricing in something closer to 1.80(ish) billion bushels.”. So, in short, there were large players anticipating a sharply lower carryout and we believe the market did a decent job at pricing that in. Remember, price precedes news.

Technicals: The market made new highs yesterday but had a poor close. The market ran back up overnight, narrowly eclipsing yesterday’s highs, likely stopping participants with stops just above the highs. With the market back in uncharted territory, finding the next meaningful resistance pocket becomes a bit of a fool’s errand. We will be looking to the short side again but will want to see confirmation of a failure and long liquidation before getting overly aggressive. Funds are overextended and December option expiration next week may be a headwind for the market over the next 10 days. Our bias remains Neutral heading into today’s session.

Bias: Neutral Previous Session Bias: Neutral

Resistance: 428** Support: 409-411 ¼****, 400-405*** Soybeans (January)

Fundamentals: Soybeans ripped higher yesterday following another bullish USDA report. The USDA had ending stocks at .190 billion bushels, 100 million less than the last USDA report and well below the average analyst estimate of .235. Going forward, participants will continue to watch demand and South American crop development.

Technicals: With the market still in uncharted territory, finding technical resistance becomes a fool’s errand. Money flow will be the name of the game in the very near term. Yesterday’s breakout point came in at 1118-1125, this will now be significant support going forward. Our bias remains Neutral.

Bias: Neutral Previous Session Bias: Neutral

Resistance: Support: 1140-1145**, 1118-1125**** Chicago Wheat (December)

Fundamentals: Yesterday’s USDA report had US ending stocks at .877 billion bushels, a few notches below the average analyst estimate, .881. The USD is grinding higher this morning which may be a headwind for the board.

Technicals: Wheat futures rallied yesterday, but it lacked enthusiasm. We failed to get out above the top end of the recent range which keeps lower highs in place. Lower lows have yet to be made, but we are still leaning on the short side until we see consecutive closes or a conviction close above technical resistance.

Bias: Neutral/Bearish Previous Session Bias: Neutral/Bearish

Resistance: 626 ¼**, 636 ¾-640** Pivot: 599-603 ½ Support: 591**, 578 ¼-584 ¼***


Don't hesitate to reach out with any questions! Email Oliver Sloup at Oliver@bluelinefutures.com or Call/Text 312-837-3938

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