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Grain Express

June 19, 2019

 Clarity on the weekly Crop Progress report: The % planted is based off of farmers intentions for that week, not the 92.8 million acres from the March Prospective Plantings report.  If delays continue and farmers are no longer able to plant, it would be possible to see the percentage increase with no actual increase in planted acres.  In other words, we will get to 100% planted, but 100% of what, is the question.

 

Corn (July)

 

Yesterday’s Close:  July corn futures finished yesterday’s session down 5 ¾ cents, trading in a range of 15 ¼ cents.  Funds were estimated sellers of 18,000 contracts.

 

Fundamentals:  corn futures continue to retreat on the back of profit taking and position squaring into Friday’s option expiration, we would not be surprised to see this continue in the back half of the week.  As mentioned in previous reports/interviews, we will be using pullbacks as buying opportunities.  Weather will remain a driving catalyst, the next week and a half continues to look wet which could extend delays and lead to additional prevent plant acres.  We will get an acreage update from the USDA next Friday; we will have estimates out beforehand.

 

Technicals: The market traded within our support and resistance levels, leaving those pockets unchanged as we head into the floor open.  Monday morning on RFD-TV we talked about pullbacks being healthy and the December contract retreating to 450-455 was our first target, that equates to 438-442 for July futures.  If you reduced longs on Monday’s reversal, this would be the spot to put exposure back on.  For those thinking that the sky is falling this week, we have not even erased all of Friday’s gains.

 

Bias: Bullish/Neutral

 

Resistance: 464 ¼**, 475***

Support: 438-442***, 423 ½-424 ¾**                

 

 

Soybeans (July)

 

Yesterday’s Close:  July soybean futures finished yesterday’s session up 2 cents, trading in a range of 18 ¾ cents.  Funds were estimated buyers of 5,500 contracts.

 

Fundamentals:  As wet weather persists, so has the buying.  The talk about prevent plant has started to shift from corn to beans and we expect to see that continue if weather confirms forecasts over the next two weeks.  Another silver lining (though slim) is the fact that President Trump will be meeting with China’s President Xi at the G-20 summit next week, a meeting that was previously taken off the table following a failure to find a trade agreement.  We will get an acreage update from the USDA next Friday; we will have estimates out beforehand.

 

Technicals:  The market failed at our 4-star resistance pocket yesterday (defined as 920 ¼-925 ¾) which has led to prices retreating.  For us, a pullback in soybeans would be viewed as healthy and present a buying opportunity.  The bulls want to defend 895 ¾-900 on a closing basis.  This pocket represents the gap from Friday’s close, the 100-day moving average, and the psychologically significant 900 handle.  That equates to 918 ½-924 ¾ for the November contract.

 

Bias: Bullish/Neutral

 

Resistance: 920 ¼-925 ¾****

Support:895 ¾-900****, 883 ¼**, 866-872 ¼***

 

 

Wheat (July)

 

Yesterday’s Close:  July Chicago wheat futures finished yesterday’s session down 8 cents, trading in a range of 15 ¾ cents.  Funds were estimated sellers of 7,000 contracts.

 

Fundamentals:  In Monday’s interview with RFD-TV and yesterday’s report we stated that wheat would be the weak link in a round of profit taking for the grain complex, that has continued to play out in the overnight and early morning trade.  Though wheat is the weakest, we are approaching technical support (see technical section below).

 

Technicals:  Our 4-star support pocket comes in from 518 ¾-521 ¾, a must hold area for the bull camp.  A break and close below here opens the door for another leg lower, closer to the psychologically significant $5.00 handle.  ON the resistance side of things, the bulls want to achieve consecutive closes back above 529-530 ¾. 

 

Bias: Neutral

 

Resistance: 542 ½-550***, 563 ½-566 ¾***

Pivot: 529-530 ¾

Support: 518 ¾-521 ¾****, 495-500***

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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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