Weekend Ag Update

March corn futures retreated on Friday as fears of coronavirus rippled through the commodity complex and the broader market (stock indices), creating a risk-off environment. Is the coronavirus alone, enough of a reason for the market to trade seven cents lower? We don’t think so. We think option expiration played a significant role in keeping a lid on prices at 390, something we talked about in last weekend’s update and through the week in our daily grain comments to clients and subscribers.

So, what’s next for corn prices? We are still optimistic that prices can work higher but need to see technical confirmation in the first half of next week’s trade. 390-392 has been the top end of the range, the market tripped stops above here this week but failed to find follow-through (again, option expiration likely played a role here). The bull camp wants to see consecutive closes above this pocket to encourage a bigger short covering rally (funds are short nearly 70,000 contracts). If the bulls fail to achieve this, we don’t think it will spell disaster, we think we will be right back in the range, creating plenty of opportunity for shorter term traders.

We went into Friday’s session with a Neutral bias but were working with clients to get long exposure on Friday afternoon, into the close. This puts our bias at Neutral/Bullish to start next week’s trade, cautiously optimistic.

Bias: Neutral/Bullish

Previous Session Bias: Neutral

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

Pivot: 383 ½-384 ¼

Support: 375-377 ¾***, 365-365 ¾****

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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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