Yesterdays Close: March corn closed ¼ of a cent lower yesterday after trading in a narrow 2 ¼ cent range. Funds were estimated sellers of 1,500 contracts on the day.
Fundamentals: Export inspections yesterday morning came in at 594,281 metric tons, this was below the low end of expectations from 600,000-800,000 metric tons and below last week’s 717,919. Export inspections are on par with the five-year average but still lagging what the USDA needs to see to get in line with their projections for 2017/2018. We need to see exports come in better than expected to offer some support and encourage short covering in the market. We are talking about a trend of better than expected exports, not just one here and one there. Ethanol numbers have been phenomenal recently which has certainly held things together better than it could be; if those numbers come off we could see that put pressure on prices. Weather in South America is still being monitored closely. Dry weather is said to have slowed the planting pace down, recent reports have Argentina at 60% planted. This is just 3% behind the same time last year, but the slowest pace going back to 1995.
Technicals: Not much has changed on the technical side of things. We continue to feel that the bears remain in control but there is opportunity to play a nickel on either side of 350 with a tight leash. 350 was a big magnet for the December contract and we feel that will hold true again for the March contract. However, if we do close below 345, we could see accelerated selling pressure enter the market and press us down towards 335 ¼, this represents the December contract lows. On the resistance side of things, the market needs to achieve consecutive closes above resistance to encourage short covering. The first line in the sand on that front comes in at 356 ¾, this represents the 50-day moving average. A very simple indicator but one that the market has not been able to close above convincingly since July.
Bias: Bias: Neutral
Resistance: 355-357****, 369 ¼-370 ½***, 375****
Support: 345-348**, 334-335 ½***, 323-325 ¼**
Yesterdays Close: January beans finished Mondays session down 5 ¾ cents, this after trading in a 13 ¼ cent range. Funds were estimated sellers of 8,000 contracts on the day.
Fundamentals: Export inspections yesterday morning came in at 1,774,555 metric tons, this was well above the expected range from 1,100,000-1,400,000 metric tons and was up from last week’s 1,233,440 metric tons. We did get a sale of 396,000 metric tons of beans to China for the 2017/2018 marketing year. Weather in South America has been on the radar (no pun intended) of many market participants recently and will continue to be. Planting in Argentina is lagging at just over 60% complete. This not only lags last year’s pace but also the longer-term average. Areas that remain dry have some wet weather working into the forecast which could be the reason for some of the recent pressure.
Technicals: The market has been under tremendous pressure over the last two weeks, trimming as much as 57 cents off of prices in just nine sessions. Despite the dramatic sell off on the back of long liquidation, the RSI (relative strength index) is only reading 35. We feel there is opportunity at these levels for a short-term relief rally, but risk needs to be tight. This was a big level back and June and the original breakout point on July 3rd. This has area has also been significant in August, September, and October. Risk vs reward is favorable in our minds. For bulls looking for a bigger move, you want to see a close back above 967-968, this would open the door to an extension towards 975 ½-977 ¾. If the market cannot regain its footing, we could see funds flip net short and press prices significantly lower; this is why you need to keep your risk tight.
Resistance: 967-968 ¼****, 975 ½ -977 ¾***, 984 ¾-989**, 999-1004**
Support: 957 ¼**, 947 ½-949 ¾***, 952-929 ¼**, 915 ¼****
Yesterdays Close: March wheat futures finished yesterdays session up 2 cents, trading in a range of 4 cents on the session. Funds were estimated to have been buyers of 1,000 contracts.
Fundametnals: Yesterday morning’s export inspections came in at 585,637 metric tons, this was above the expected range from 250,000-450,000 metric tons and up from last week’s 354,527 metric tons. As we have been mentioning for several months now, we need to start seeing consistent beats with the weekly export data. Low prices tend to cure low prices so perhaps that is on the horizon and could help put a floor in the market. With that said, we will also likely have a ceiling in the market as ample global supplies will likely halt any attempt at a significant rally.
Technicals: The market has slowly but surely been grinding higher. 424 ¼ has been our first line in the sand to look at selling, but we think patience for higher prices could pay off. The next line in the sand we are looking at comes in at 438 ¾. This represents the 50-day moving average, a very simple technical indicator but like with corn, it is one we have not been able to close above since July. Consecutive closes above could encourage a short covering rally so be sure to manage your risk properly.
Resistance: 424 ¼**, 438 ¾***, 443-445¾ ****
Support: 399-402 ¾****, 392-394**, 381-383 ¾***
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