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Fundamentals: Friday’s WASDE report was delayed several minutes due to issues with the USDA server, algos put a bid in the market on the inability to break and then traded higher on the headline number coming in below expectations, yield. Yields came in at 167.0, below the average estimate. What offset that was more acres and production than expected, coupled with a cut in demand. Demand has continued to be the thorn in the side of the bull camp, we think it will turn eventually but it may take lower prices and time to do that.
Technicals: Last week’s technical breakdown (pre WASDE report) moved our bias from Bullish/Neutral, to outright neutral. Friday’s failure and reversal now has the bear camp in clear control. If the bulls cannot reclaim ground above 377-381 ½, we could see the market bleed lower and possibly retest contract lows at 352 ¼.
Previous Session Bias: Neutral
Resistance: 390-392 ¾***, 400-402 ½***
Pivot: 377-381 ½
Support: 363-366***, 350-352 ¼****
Fundamentals: Soybean futures finished Friday’s session a little lower, but much of that was on walk backs of positive trade headlines from Thursday. The WASDE report was as neutral as it gets with yield estimates unchanged and harvested acres, production, and carryout coming in within the range of expectations. The lack of bullish news may put a little bit of a lid on things to start the week.
Technicals: There is a plethora of technical support from 922 down to 909 ½, including all three major moving averages (50, 100, and 200), a key retracement, and several previously important price points. Though the chart has become more neutral/bearish in the short term, the bulls have the advantage on a longer-term time frame.
Previous Session Bias: Bullish
Resistance: 940-941 ½***, 953-959 ½****, 973 ¼-979 ¼***
Pivot: 928 ½
Support: 919 ½-922***, 909 ½-913****, 894-895 ¾**
Chicago Wheat (December)
Fundamentals: Chicago wheat futures finished Friday’s session on softer ground on higher world ending stocks and spillover weakness from the broader grain complex. The dollar rebounded strong last week which was another headwind for the bull camp to overcome. We will be keeping an eye on that along with the broader grain complex to start the week.
Technicals: The market failed to stabilize above our pivot pocket from 515 ¼-517 ¼ which has the bears in control to start this week’s trade. Support comes in from 496 ¼-500. If the bulls cannot defend this pocket, we could see a bigger decline, towards 485 ½-489 ¼.
Previous Session Bias: Neutral/Bearish
Resistance: 521 ¾-523 ¾**, 535-538 ½****
Pivot: 515 ¼-517 ¼
Support: 496 ¼-500 ¾****, 485 ½-489 ¼***
Kansas City Wheat (December)
Technicals: The market spent the back half of last week’s trade on the defense, but prices are approaching technical support, we have defined that as 411 ½-415 ½. This pocket represents trendline support, a key retracement, and the 50-day moving average. We believe this is a buying opportunity on the first test, but a break and close below would neutralize our bias.
Previous Session Bias: Bullish/Neutral
Resistance: 428**, 437-439 ½***, 454-457 ¾****
Support: 411 ½-415 ½****, 397-400***, 380*
Technicals: Cotton futures caught a bid on Friday thanks to a half-way friendly WASDE report. Unfortunately for the bull camp, it was not friendly enough to encourage a breakout above technical resistance, which has led to early morning weakness today. The bulls must defend support from 62.91-63.39 to remain in control. A break and close below would neutralize our near-term bias.
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.