• Oliver Sloup

Weekend Grain Market Update

Corn (March)


For the Week: March corn futures were down 5 ½ cents, trading in a range of 7 ½ cents.


Commitment of Traders: Managed money sold 16,094 contracts from Feb. 4th-11th, extending net short position to 72,084.


Bottom Line: It was a risk-off trade ahead of an extended weekend with the markets closed on Monday (Presidents Day). The USDA released their baseline report yesterday at 11am CT, when the volume and pressure started to pick up steam. The synopsis: a lot of corn for the foreseeable future. There’s not an ounce of bullish news to be found, but we think that majority of the bearish news is already known. So long as nothing crazy happens over the long weekend, we remain optimistic on prices and believe the risk/reward favors the buy-side at the bottom end of the range. March option expiration is next week, it looks like the 380 puts and calls is where the majority of the open interest is, which could make it a magnet.

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Soybeans (March)


For the Week: March soybean futures finished 10 ¾ cents higher, trading in a range of 21 ¾ cents.


Commitment of Traders: Managed money sold 9,814 contracts from Feb. 4th-11th, extending their net short position to 92,172.


Bottom Line: Soybean futures did a great job stabilizing last week but softened up Friday on a risk-off trade ahead of a long weekend. We had turned optimistic on beans earlier in the week but had a Neutral bias before the bell rang on Friday. We went to neutral because first resistance from 900-905 ¾ was all but achieved in the previous session and we were expecting to see a lid on prices ahead of the long weekend. On top of that, there is a lot of open interest in the $9.00 calls that expire next week which could limit upward mobility in the very near term. Prices ended up retreating back to 888 ¼-890 ½, previously resistance, now support. If the world is still in one piece when the markets re-open, we would consider re-entering at these levels.


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Call/Text/Email: 312-837-3938 / Oliver@BlueLineFutures.com


Wheat (March)


For the Week: Chicago wheat was down 16 cents, trading in a 22 ½ cent range.


Commitment of Traders: Managed money sold 6,221 contracts of Chicago wheat from Feb. 4th-11th, shrinking their net long position to 45,940 contracts. Funds sold 2,225 contracts of Minneapolis wheat, extending their net short position to 6,854 contracts. The only buying funds did in the grains was in the KC wheat, buying 2,218 contracts, extending their net long position to 10,479 (perhaps we finally see that Chicago/KC spread tighten up).


Bottom Line: The bearish head and shoulders pattern and trend of lower highs and lower lows continues to play out in Chicago wheat, keeping our target into the mi 520’s alive. Another headwind for the wheat market has been the strength in the U.S. Dollar which made multi-month highs last week. If you want to be long wheat, you may want to consider being long the KC contract against the Chicago contract. This spread went bonkers last year and never looked back, but that tide could be turning as we speak.


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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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