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Fundamentals: December corn futures made new highs and reversed yesterday, as funds look to take profits from a historic net long position. As mentioned in yesterday’s report, we believe that the funds position coupled with next week’s option expiration could continue to be a headwind for prices over the next week. Also mentioned in yesterday’s report, we believe that the market did a decent job in pricing in the big drop in carryout, citing our quote from the October 16th Grain Express report where we mentioned the market was trading more like a 1.8 billion bushel carryout (just after the USDA released their 2.167). Remember, price precedes news. I am old enough to remember when corn futures rallied from contract lows, following a bearish USDA report on August 12th.
Technicals: The market made new highs yesterday, likely stopping out weak shorts with stops just above the previous session’s high (as mentioned in yesterday’s report). The market closed towards the low end of the session which has bled into follow through long liquidation in the overnight/early morning trade. Our first support pocket comes in from 409-411 ¼. A break and close below here could take us back to 400-405 ahead of next week’s option expiration. This would be an area where a lot of options on both sides (puts & calls) would expire worthless.
Previous Session Bias: Neutral
Support: 409-411 ¼****, 400-405***
Fundamentals: Soybeans made new highs but reversed and spent the majority of the normal trading session playing defense. Money flow will be the biggest catalyst for us in the near term, along with weather and crop development in South America.
Technicals: Soybeans made new highs yesterday but closed about 10 cents off the highs, not the greatest price action. The first support was tested and has so far held this morning, that comes in from 1140-1145. If the Bull camp fails to defend this pocket, we could see long liquidation take us back to the breakout pocket, 1118-1125. We do not mind playing the short side here in the near term, but you will want to see confirmation of weakness when the floor opens at 8:30 AM CT. If we do not get that long liquidation and first support holds, take your medicine, and move on.
Previous Session Bias: Neutral
Support: 1140-1145**, 1118-1125****
Chicago Wheat (December)
Technicals: Wheat futures tried to rally yesterday but fell flat when the floor opened, and long liquidation ensued. If corn and beans retreat, that will likely accelerate the selling in wheat futures. Futures finished yesterday’s session just below the low end of our pivot pocket, 599-603 ½, opening the door for another leg lower. We listed first support at 591, this was tested and held this morning, but our more significant support pocket comes in from 578 ¼-584 ¼.
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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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.