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Grain Express

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Corn (December)

 

Fundamentals:  December corn futures went bid on Friday as shorts rushed to cover ahead weekend uncertainty.  That uncertainty came from the weather and trade talks.  Weather ended up being within the realm of expectations which is why you’re seeing futures little changed this morning, this was a classic, buy the rumor sell the news situation; something we wrote about last Wednesday.  There was also a lot of hype surrounding trade on Friday, that fell flat too (considering the hype).  Due to Columbus Day, USDA reports will be pushed back, notably export inspections and crop progress.

 

Technicals:  Thursday and Friday were technically sound days, offering a chance to reduce against resistance and buy back at technical support.  We have had this range defined as 377-381 ½ (support) and 398-401 (Resistance).  Despite Thursday’s pullback we moved our bias to outright Bullish going into Friday’s session.  We remain friendly on prices but would not be surprised to see a “cleanse” to start the week.

 

Bias: Bullish/Neutral

Previous Session Bias: Bullish

 

Resistance: 400-402 ½***, 412 ¾-417 ¼****

Pivot: 390-392 ¾

Support: 377-381 ½ ****, 363-366***

 

Soybeans (November)

 

Fundamentals:  Buyers were present Friday as weather and talks of a trade deal added premium to the market.  This was setting up for a classic, buy the rumor sell the news situation.  Weather came inline with expectations and the “trade deal” lacked substance (shocker).  This will be like the story of The Boy Who Cried Wolf at some point; we will get a trade deal, but nobody will believe it because of the constant jawboning over the last year.  Looking at it from a strategist point of view, removing political bias, there likely won’t be a deal until closer to the election and it will be on concessions from the U.S.  Due to Columbus Day, USDA reports will be pushed back, notably export inspections and crop progress.

 

Technicals:  The market made a run at our 4-star resistance pocket from 948-950 in the overnight trade, the market has since pulled back bullish headlines receding.  The November contract also set a new high on the RSI (relative strength index), indicating things got overdone to the buy side.  We remain optimistic on prices but saw a lot of premium put into the market Friday and would welcome a pullback.  First key support this week comes in from 920-924. 

 

Bias: Bullish/Neutral

Previous Session Bias: Bullish

 

Resistance: 936 ½-938 ¾***, 948-950****

Support: 920-924**, 899-906 ¾ ****, 879 ½-882 ¾***

 

Chicago Wheat (December)

 

Fundamentals:  Chicago wheat futures broke out above resistance on Friday on the back of short covering and spill over momentum from the broader grain complex.  Friday’s commitment of Traders report showed funds are still short 19,138 contracts, a reduction of 2,376 from the previous week.  If money flow stalls in corn and beans to start week we could see that lead to pressure in wheat futures.  Due to Columbus Day, USDA reports will be pushed back, notably export inspections and crop progress.

 

Technicals:  The market broke out above technical resistance from 500-506 ¼, igniting a move towards 515 ¾, a key Fibonacci retracement.  Previous resistance now becomes support, the bulls will want to defend 500-506 ¼ to remain in control.  A move out above 515 ¾ could spark additional short covering towards 525 ¾-531 ½. 

 

Bias: Neutral/Bullish

Previous Session Bias: Neutral

 

Resistance: 515 ¾**, 525 ¾-531 ½****

Support: 500-506 ¼****, 483-486 ¾***, 476 ¼****

 

Kansas City Wheat (December)

 

Tehcnials:  Despite Thursday’s selloff we moved our bias to outright Bullish on Friday, due to our technical support pocket holding from 397-400.  The market made a big recovery Friday and is trying to hold onto some follow through gains to start today’s session.  Previous resistance now becomes support, bulls want to defend 415 ½-420. 

 

Bias: Bullish/Neutral

Previous Session Bias: Bullish

 

Resistance: 428-432 ¾****, 437-442**

Support: 415 ½-420**, 397-400***, 380*

 

Cotton (December)

 

Fundamentals:  The cotton market got a shot of adrenaline Friday as shorts rushed to cover, Friday’s report showed funds bought back 5,489 contracts.  Weekend weather and hopes of a real trade deal, that momentum carried over into the overnight session but has quickly dissipated. 

 

Technicals:  The higher close on Friday was encouraging but the market was setting itself up for an over promise under deliver situation.  The weather was inline, and the trade deal lacked substance.  That coupled with stiff resistance near 65 and the market is now retreating.  We still like the trend of higher lows and higher highs but think there is more value closer to 62.50. 

 

Bias: Neutral/Bullish

Previous Session Bias:  Bullish/Neutral

 

Resistance: 65.00-65.85****, 68.35-68.60***

Pivot: 62.50-62.91

Support: 59.58-60.79***, 56.59-57.55****

 

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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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