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Grain & Cotton Express

Corn (December)

 

Fundamentals: December corn futures managed to trade to their highest level in over a week as wintery weather moves through the Midwest and spurs some short covering from the funds. That cold weather looks to persist through the weekend for some areas, possibly ending the growing season for late planted corn. Yesterday’s weekly ethanol report showed production increased 8,000 barrels per day to 1,004,000 bpd. Export sales this morning came in at 549,100 metric tons, up 29% from the 4-week average. The bulls desperately need to see the demand pick up in order to stage a more meaningful rally.

 

Technicals: The market worked into our first resistance pocket yesterday and ran out of gas, we have had that defined as 390-392 ¾. The failure has led to a weaker overnight/early morning trade, but we remain optimistic and are taking the light volume trade with a grain of salt. If the bulls can achieve a strong close above resistance, we could see an extension towards 400-402 ¾. This pocket is psychologically significant, but it also contains the 100 and 200 day moving average, the October 14th highs, and other previously important price points.

 

Bias: Bullish

Previous Session Bias: Bullish/Neutral

 

Resistance: 390-392 ¾***, 400-402 ½***, 412 ¾-417 ¼****

Support: 377-381 ½ ****, 363-366***

 

Soybeans (January)

 

Fundamentals: January soybean futures were a laagered yesterday as optimism around a phase-1 trade deal diminished after the Summit in Chile was cancelled, due to protests in Santiago. With that said, was anyone really expecting anything substantial from a would be “phase-1” deal? We continue to be very hesitant on trade optimism until we get closer to the election, nearly a year away. As I’m writing this, there are reports that Beijing could ax tariffs on U.S. farm products to boost exports. This is a recycled headline but should not be completely ignored. Export sales this morning came in at 943,600 metric tons, down 39% from the 4-week average.

 

Technicals: January soybeans tested our technical support pocket in the overnight trade, we have had that defined as 921-928 ½. We have noted that we believe this is a buying opportunity on the first test, if you’re bullish. This pocket represents a key retracement, the 200-day moving average, and other previously important price points, including the secondary breakout point from October 1st. For the bulls to capitalize, the need to see consecutive closes above 940-941 ½. That would open the door for a potential retest of resistance from 953-959 ½.

 

Bias: Bullish

Previous Session Bias: Bullish/Neutral

 

Resistance: 953-959 ½****, 973 ¼-979 ¼***

Pivot: 940-941 ½

Support: 921-928 ½***, 899-906 ¾ ****

 

Chicago Wheat (December)

 

Fundamentals: December wheat futures continue to trickle lower as market participants seem a little concerned that the recent rally may price the U.S. out of the market. With that said, exports were healthy this morning, coming in at 493,800 metric tons. This is up 31% from the 4-week average. The US Dollar is making a run back at the recent lows, a further breakdown here could help support prices.

Technicals: The market has officially moved into our 4-star support pocket, we have had that defined as 500-506 ¼. This pocket is psychologically significant, but it also contains the 100 and 200 day moving average, trendline support, and other previously important price points. If you’re bullish Chicago wheat, this is a pocket where you might find value, on the first test.

 

Bias: Neutral

Previous Session Bias: Neutral

 

Resistance: 525 ¾-531 ½**, 538 ¼-543****

Pivot: 515 ¼**

Support: 500-506 ¼****, 485 ½-489 ¼***

 

Kansas City Wheat (December)

 

Technicals: KC Wheat has been grinding lower but has been defending our pivot pocket from 415 ½-420. If the market fails to hold here, we could see a small leg lower towards 408 ½-409. This pocket represents the 50-day moving average and trendline support from the contract lows. If you’re bullish KC Wheat, this is the spot to start getting aggressive. With that said, you should be reading, willing, and able to add down to $4.00.

 

Bias: Bullish/Neutral

Previous Session Bias: Bullish/Neutral

 

Resistance: 437-439 ½***, 454-457 ¾****

Pivot: 415 ½-420

Support: 408 ½-409****, 397-400***, 380*

 

Cotton (December)

 

Fundamentals: Export sales this morning came in at 108,100 rb, this was down 23% from last week and down 39% from the 4-week average. The bulls need to see this be a one-off number. optimism around a phase-1 trade deal diminished after the Summit in Chile was cancelled, due to protests in Santiago. With that said, was anyone really expecting anything substantial from a would be “phase-1” deal? We continue to be very hesitant on trade optimism until we get closer to the election, nearly a year away. As I’m writing this, there are reports that Beijing could ax tariffs on U.S. farm products to boost exports. This is a recycled headline but should not be completely ignored.

 

Technicals: December cotton futures managed to make a new closing high but failed to close above technical resistance at 65.85. The market is retreating this morning and if the bulls cannot find footing, we could see a deeper correction. We remain optimistic but would welcome a pullback and see it as a buying opportunity.

 

Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

 

Resistance: 65.85-66.05****, 68.35-68.60***

Support: 62.91-63.39****, 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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