Fundamentals: Corn futures finished last week’s trade with a new closing low. Headlines regarding trade with China have been bi-polar over the last 48 hours, seen by the broader markets price action. This weekend we got a different trade headline, helping support corn prices in the overnight session. Japan, one of our most reliable trade partners, has agreed on principle elements of a deal to buy excess U.S. corn. Crop Progress will be out after the close, expectations are for the Good/Excellent rating to at 57%, up 1% from last week. Friday’s Commitment of Traders report showed funds sold 101,000 (biggest 1-week sell since March of 2017) contracts and are now short 56,441 contracts.
Technicals: December corn futures are trying their best to market a double bottom against the contract lows from May 13th, 363 ¾. The chart is still ugly as sin, but if you’re friendly corn the risk/reward here seems favorable. Support remains intact from 363 ¾-369. On the resistance side of things, the bulls need to chew through 381 in hopes of getting a leg higher to fill the gap near 392 ¾.
Previous Session Bias: Neutral/Bullish
Resistance: 381**, 392 ¾***, 405-407**
Support: 363 ¾-369***, 338 ¾-343**
Fundamentals: Soybeans took a lot of heat in the back half of last weeks trade as talks between China and the U.S. hit another brick-wall. Both sides have tried to soften those headlines over the last 12 hours, rallying outside markets and soybeans. We are taking the overnight session with a grain of salt and would not be terribly surprised to see the early morning pop sold into. There is a growing concern over a cooler weather pattern developing that could stunt the late planted crop. Estimates for Crop Progress are for the crop to be rated 54% Good/Excellent, up 1% from last week. Friday’s Commitment of Traders report showed funds short 72,432 contracts.
Technicals: Like corn, soybeans are trying to mark a double bottom from the spike low on August 5th. A break and close below though opens the door for a run at contract lows from May 13th, 815 ½. The two-month trend of lower lows and lower highs has been the gift that keeps on giving, but if the bulls can defend higher lows (from August 5th) then perhaps the market can start forming a near-term low. Our bias from Friday remains intact at Neutral/Bullish, but a break and close below 854 ½ would be bearish in our opinion.
Previous Session Bias: Neutral/Bullish
Resistance: 891 ½-896 ¾**, 921-924***
Support: 854 ½-860 ½****, 839 ¾-843 ¾**, 815 ½****
Chicago Wheat (December)
Fundamentals: Wheat futures are working on posting their 4th consecutive close higher, what we see as more of a relief rally than a fundamental rally. The demand picture continues to weigh on the market and at the very least will remain a headwind in the near term. Friday’s Commitment of Traders report showed funds short 1,249 contracts through August 20th.
Technicals: The market is coming off the recent low nice and orderly, resembling more of a relief rally than a capitulation low. The trend of lower highs and lower lows has been a trend for the last 2 ½ months after posting a double high in June. Trend-line resistance comes in close to 493, just above that is the 100-day moving average, break down point from August 12th, and the physiologically significant $5.00 handle. Bears remain in control until consecutive closes above here.
Previous Session Bias: Neutral
Resistance: 483 ½**, 493-500****, 525 ¾-531 ½****
Support: 461 ¾-466***, 442-446**, 427 ¼****
Kansas City Wheat (December)
Previous Session Bias: Bullish
Resistance: 409-409 ¾**, 428-432 ¾****
Support: 397 ½-400****
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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.