Tag: soybeans

CORN (March)

Yesterdays Close: March corn futures finished yesterday’s session down ½ of a cent, trading in a range of 3 ¼ cents. Funds were estimated sellers of 5,000 contracts.

Fundamentals: Recent weather in Argentina has prompted concerns over yield loss, if realized this could be a catalyst to achieve a technical breakout and encourage short covering. We have February option expiration on Friday and 350 looks to be the magnet. As of this morning there are roughly 33,000 open calls between 350 and 355. On the put side, there are roughly 27,000 open between 350 and 345. Strikes with high open interest tend to be a manet into expiration. We had mentioned in yesterday’s report that export inspections would not be released due to the government shutdown, we were then told otherwise shortly after our release, so we apologize for that. Export inspections came in at 668,944 metric tons, this compares to the expected range from 800,000-1,000,000 metric tons; last weeks was 584,389 metric tons.

Technicals: Yesterday morning corn prices were lingering at the top end of the range again, an area where expectations need to be tempered. I would love nothing more than to see corn rally, but you have to trade the market you have, not the one you want. The market rejected the top end of the range and that brings us right back down towards the 350 level which continues to be a magnet. We continue to believe there is an opportunity to trade a few pennies on either side until we get that technical breakout or breakdown.

Bias: Bearish

Resistance: 354-355**, 358-360 ½****, 366 ½-369 ¼****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Yesterdays Close: March soybeans gaped higher on the open, finishing the session up 8 ¼ cents, trading in a range of 7 ¼. Funds were estimated buyers of 7,000 contracts.

Fundamentals: Hot and dry weather in key growing areas in Argentina sparked the gap higher yesterday and the market managed to hold ground on the back of those concerns. If we start to see moisture work into the forecast, you can expect that premium to come out of the market. Export inspections yesterday morning came in at 1,419,430 metric tons, this was above the top end of the expected range from 1,000,000-1,400,000 metric tons. Last week’s number came in at 1,231,037 metric tons. February option expiration is this Friday, it is possible that this could keep a lid on another leg higher but there’s nothing significant to report in terms of significant open interest at a specific strike (like corn).

Technicals: The market has managed to close higher for 6 of the last 6 sessions and it appears we could see number 7 today. Despite the march higher, the RSI (relative strength index) is only at 60. Technical resistance has been tested yesterday and is again being tested in the early morning session. We have defined resistance as 986 ½-987. This pocket represents the 100-day moving average and the 50% retracement (middle of the range) from the June lows to July highs. If we fail to see an extension we would not be surprised to see the market come back to support wit the first line in the sand coming in at 979 ¼, but the more significant level is 971 ¾. If you’ve been wrong for the past week and a half this is where you should consider reducing. We still think there is more upside potential but a consolidation lower would be healthy. There is seasonal buy around the corner, we will keep you posted on that when we get closer.

Bias: Neutral

Resistance: 986 ½-987***, 999-1004**

Support: 979 ¼**, 971 ¾ ***, 961 ¼-963 ¼**, 950-952 ¼***

 

WHEAT (March)

Yesterdays Close: March wheat futures gaped higher yesterday and finished up 4 cents, trading in a range of 4 ¼ cents on the day. Funds were estimated buyers of 2,000 contracts.

Fundamentals: Export inspections yesterday morning came in at 337,980 metric tons, this was within the expected range from 250,000-400,000 metric tons; last weeks was 368.651 metric tons. We know that funds have established a solid net short position, but we do not see any fundamental catalyst at this point that would spook them out just yet. Demand continues to be lackluster which will likely keep a lid on any significant rally. February option expiration is on Friday, there is nothing that sticks out in terms of strikes with significant open interest.

Technicals: The market looks like it is rounding out after trying to recover all of the loses from the most recent USDA report. First technical resistance today comes in at 429 ½, if the market can achieve a conviction close above this level, perhaps we see some short covering from funds push prices towards 443. A failure to breakout will likely lead to a test of the contract lows at 410 ½.

Bias: Bearish

Resistance: 429 ½-430**, 437**, 443-448 ¼ ****

Support: 410 ½-413 ¼***, 399-402 ¾****

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

 

CORN (March)

Yesterdays Close: March corn futures finished yesterday’s session up 3 ¾ cents, trading in a range of 5 on the day. Funds were estimated buyers of 17,000 contracts.

Fundamentals: Yesterdays move higher is mostly attributed to short covering funds as there was not much new news across the wires. Weather in South America continues to be watched closely as some weather models conflict each other. Outside of South American weather and crop development, we will continue to keep an eye on the trend of exports. The market needs to start seeing a trend of better than expected numbers to encourage additional short covering and invite new buying into the market. Due to the Martin Luther King holiday on Monday, the weekly exports data has been pushed back to tomorrow at 7:30am cst.

Technicals: The market is officially trading above the 50-day moving average for the first time in over a month. Though that is encouraging for bulls, we will be watching this on a closing basis as we have not seen a conviction close above this indicator since July. If we see a close above, the next resistance pocket comes in at 358 ¼-359 ¼. This pocket represents the 100-day moving average along with a key Fibonacci retracement level. The bears are still in control as we have made lower lows and lower highs over the past several months. If we fail to “breakout” we will likely see prices retreat towards the bottom end of the range which we have defined as 345-346 ½.

Bias: Bearish

Resistance: 358 ¼ -359 ¼***, 367-369 ¼****

Pivot: 352 ¼

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Yesterdays Close: March soybeans finished up 2 ½ cents yesterday, trading in a range of 8 cents on the session. Funds were estimated buyers of 2,000 contracts.

Fundamentals: With the USDA report now behind us, market participants will turn their attention back to South American weather and crop development along with weekly export data. There is not much new news to report on the weather front this morning. Due to the shortened trading week, export sales data has been pushed back to tomorrow morning at 7:30am cst. Also on trader’s radar is the soybean complex including soybean meal and soybean oil as both have shown strength recently.

Tehcnicals: March soybean futures filled the gap yesterday that was down at 962 ¾ which was followed up by buying. Bulls need to see a close above 971 ¾ soon to encourage additional short covering and new buying in the market. A close above resistance opens the door to an extension towards 984 ½-986 ½. This pocket contains several technical indicators including the 50 and 100 day moving average, along with the 50% retracement from the June lows to the July highs.

A failure to breakout will lead to pressure on prices, likely down to the bottom end of the range near 950 as technical traders exit longs because they are not getting what they want from the market. We continue to be friendly towards the market but need to see the market work higher into the weekend.

Bias: Bullish

Resistance: 971 ¾ ***, 979**, 984 ½-986 ½***, 999-1004**

Support: 950-952 ¼***, 937 ½***, 922 ¼****

 

WHEAT (March)

Yesterdays Close: March wheat futures finished yesterday’s session up 5 ¼ cents, trading in a range of 7 ¾ on the day. Funds were estimated buyers of 4,500 contracts.

Fundamentals: Wheat futures worked higher yesterday on the back of what was likely short covering on concerns of cold and dry weather in some key growing areas. It will likely still be a few weeks before we see the true effects of the recent weather on the crop. Export sales that are normally released this morning are pushed back to tomorrow due to the shortened trading week; they will be released at the normal time 7:30am cst.

Technicals: The bulls have been putting up a decent fight over the last month, but the bears remain in control until we see a conviction close above technical resistance. The first line in the sand comes in at 425 ¼. A close above opens the door to a potential run at the recent highs of 437. A failure to see closes above these resistance levels will likely lead to new contract lows below 410 ½.

Bias: Bearish

Resistance: 425 ¼**, 437***, 443-448 ¼ ***

Support: 410 ½**, 399-402 ¾****

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

CORN (March)

Last Weeks Close: March corn futures finished Fridays trade just 1 ½ cents lower, trading in a range of 4 ½ cents on the day. Funds were estimated sellers of 13,000 contracts (larger volume due to USDA report). For the week March corn futures finished the week down 4 cents, trading in a range of 6 cents. Fridays Commitment of Trader’s report showed funds have a net short position of 222,516 futures and options. Keep in mind that the CoT data is compiled, and funds have likely exceeded their previous record short of 230,556 futures and options.

Fundamentals: Last week’s USDA report had a bearish tilt to it but managed to stabilize relatively well. Quarterly stocks came in at 12.516 billion bushels and ending stocks at 2.437 billion bushels, both of which were above the average estimate. Yield and total production was also increased. The market has found stable ground in the Monday night/Tuesday morning trade as weekend rains were disappointing in parts of Brazil and Argentina.

Technicals: March corn futures made new lows following the release of Fridays USDA report but managed to close above technical support which we have outlined as 345-346 ½ for some time now. Some of that momentum has carried over into the early trade here Tuesday morning. Though we have been range bound for the better part of the last 5 months, the bears have the edge as lower highs and lower lows have been the trend. If we see a break and close below 345, we would expect to see a continuation towards 334-335 ¼. The only silver lining for the bulls is that the funds could spark a rally from short covering. If you’ve been banking on this for a while you’ve been disappointed. The funds previous record short position was reduced by 70k contracts and the market only rallied roughly 4 cents off of contract lows. If funds start reducing, it doesn’t mean the flip. The trend is your friend, and right now that is sideways. We continue to feel that there is opportunity 2-5 cents on either side of 350 until we get a breakout or breakdown; not the most exciting trade but you have to take advantage of the market you have not the one you want. First technical resistance comes in at 353, this represents the 50-day moving average. A very simple indicator but one we have not closed above since July.

Bias: Neutral

Resistance: 353-355***, 359 ¼-359 ½***, 367-369 ¼****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Last Weeks Close: March soybean futures finished Fridays session up 13 ½ cents, trading in a range of 18 ¼ cents; funds were estimated buyers of 11,000 contracts on the session. For the week, March soybean futures finished the week down 7 ¼ cents, trading in a range of 27 cents. Fridays Commitment of Traders report showed that funds have a net short position of 92,835 futures and options, this is their 5th largest short position on record and the most since June when we bottomed. Keep in mind that the CoT data is compiled through Tuesday.

Fundamentals: Last week’s USDA report was moderately friendly with quarterly stocks coming in at 3.157 billion bushels, this vs the average analyst estimate of 3.181 billion bushels. Ending stocks came in at 470 million bushels, this vs the average analyst estimates of 472 million bushels. Production and yields were also lowered slightly. Some of the strength in the overnight and early morning trade is coming from follow through USDA buying along with disappointing weather in South America over the long weekend. Drier conditions persist in areas of Argentina and Brazil. If rain makes its way back into the forecast, expect that premium to come out of the market.

Technicals: The chart has been ugly, there’s no way to sugar coat that, but we have continued to suggest there is value at these levels. We know that funds have a rather large net short position, it often seems funds don’t hold that large of a short position in beans as opposed to corn and wheat. We recommended using cheap call options last week and to start looking at futures from 950-952 ¼. Fridays report could be the spark that gets the market going in the right direction. If we see a close back above 971 ¼, we expect to see additional momentum press prices towards our next resistance pocket from 986-986 ½. This very narrow pocket contains the 50 and 100 day moving average, along with the 50% Fibonacci retracement (middle of the range) from the June lows to the July highs. If the market fails to hold Fridays rally in the first half of the week, we expect to see 937. So often market participants only plan for an exit if the market goes their way, you must also prepare an exit for if they don’t.

Bias: Bullish

Resistance: 971 ¾**, 979**, 986-988 ¼***, 999-1004**

Support: 950-952 ¼***, 937 ½***, 922 ¼****

 

WHEAT (March)

Last Weeks Close: March wheat futures closed 13 ¼ cents lower on Friday, trading in a range of 17 ¼ cents. Funds were estimated to have been sellers of 10,500 contracts on the day. Expanded ranges and increased volumes were on the back of the USDA report. For the week, wheat finished down 10 ½ cents, trading in a range of 17 ¼ cents. Fridays Commitment of Traders report showed funds short 129,000 contracts, this was an increase of 1,000 contracts; keep in mind that this data is compiled through Tuesday and is likely much larger now.

Fundamentals: Wheat futures took a hit on Friday and are continuing their slide in the early morning trade as Fridays USDA report confirms the continued bearish bias from traders. Quarterly stocks came in at 1.874 billion bushels, above the average analyst estimate of 1.849 billion bushels. Ending stocks came in at .989 billion bushels, above the average analyst estimate of .959 billion bushels. Winter wheat seedlings came in at 32.608 million acres, vs estimates of 31.107 million acres. Ample global supplies and dismal demand continues to be the story that is keeping a lid on any significant rally.

Technicals: Wheat futures failed to get above our first resistance pocket this week from 434-437 ½. The bearish report opened the door to our three star support that comes in from 416 ½-420 ¾. A close below here opens the door to contract lows at 410 ½ and a possible test to the $3 handle. If the bulls are able to hold support, perhaps we consolidate; but this is a market we have been very adamant about selling on rallies. We continue to believe that is the case until we get a new fundamental catalyst to change the technical backdrop.

Bias:Bearish

Resistance: 425 ¼**, 435-437 ½**, 443-448 ¼ ***

Support: 416 ½-420 ¾***, 410 ½**, 399-402 ¾**** 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

CORN (March)

Yesterdays Close: March corn futures closed up 1 ¼ cent, trading in a range of 2 ¾ cents on the session. Funds were estimated to have been buyers of 4,500 contracts.

Fundamentals: Trade estimates are starting to circulate which is ramping up the anticipation of Fridays USDA report, arguably the biggest report of the year. The headline number will be yields, but the valuable nuggets will be in the ending stocks data. Corn yield estimates are ranging from 173.7-176.4 with the average estimate at 175.2. Trade estimates for US quarterly stocks are ranging from 12.23-12.68 billion bushels with the average estimate at 12.41 billion bushels. US ending stocks estimates are ranging from 2.26-2.52 billion bushels with the average estimate at 2.44 billion bushels. We will get updates from CONAB tomorrow on South American production.

Technicals: The market continues to hug the 350 level which continues to be a magnet for front month futures. Although it has been a trader’s paradise trading the tight range over the past several months, many market participants are looking for a new direction (other than sideways). If you are in that camp, volatility is cheap, meaning options should be on your shopping list. If we get a friendly report and a technical close above resistance, we could see continued short covering from the funds. The 50-day moving average is the first line in the sand at 353 ½, above that the market has room to run towards 359 ¼-359 ½. On the support side, a close below 345-346 ½ opens the door to 334-335 ¼.

Bias: Neutral

Resistance: 353 ½ -355 ¼***,359 ¼-359 ½***, 367-369 ¼****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Yesterdays Close: March soybean futures finished down 3 ¾ cents, trading in a range of 7 ½ cents on the day. Funds were estimated to have been sellers of 3,000 contracts.

Fundamentals: Market participants continue to gear up for Fridays USDA report which is arguably one of if not the biggest report of the year. Yield numbers will be the headline number, but ending and quarterly stocks will be the more significant numbers. Quarterly stocks estimates range from 2.96-3.31 billion bushels with the average coming in at 3.19 billion bushels. US Ending stocks estimated range is from .425-.595 billion bushels with the average of .445 billion bushels. Weather in South America will continue to be monitored. Rains are coming in and going out of forecasts on a continued basis, this has led to a bit of a choppy trade here to start the week.

Technicals: The market has been chopping around between 960 and 970 give or take for the last week and a half, likely shaking out a lot of week shorts and longs as we head into Fridays USDA report. 971 ¾ continues to be the first line in the sand the bulls want to close above. If they can achieve this, we will likely see funds start to cover their short position and press prices back towards 986-988 ¼. This pocket contains a handful of indicators including the 50 and 100 day moving average, along with the 50% retracement or the middle of the range from the June lows to the July highs. On the support side, there isn’t a while lot until 950-952 ¼, this would be the most ideal spot to look long futures. If you wanted long exposure ahead of the report without worrying about swings in futures, consider looking in the options market.

Bias: Neutral

Resistance: 971 ¾**, 977-979 ¼**, 986-988 ¼***, 999-1004**

Support: 950-952 ¼***, 937 ½***, 922 ¼****

 

WHEAT (March)

Yesterdays Close: March wheat futures finished up 4 ¾ cents yesterday, trading in a range of 8 ½ cents. Funds were estimated buyers of 4,000 contracts.

Fundamentals: The market has been working higher on some colder temperatures and drier weather are coming back into the forecast over the weekend. On top of that, we also have an important USDA report on Friday that is likely prompting some short covering. US quarterly stocks estimates range from 1.80 billion bushels to 1.91 billion bushels with the average at 1.85 billion bushels. US ending stocks are estimated to come in from .855 billion bushels to .987 billion bushels with the average estimate at .96 billion bushels.

Technicals: March wheat futures are testing the 50-day moving average again in the early morning trade. The fact that the market has not rejected prices again from this level could lead to some short covering. If the bulls can achieve a conviction close above, we could see funds cover shorts and press prices towards 443-448 ¼. Baring any significant change in fundamentals, we think this would set up for an excellent opportunity to sell. Bears wan to defend 435-437 ½ on a closing basis to prevent short covering.

Bias: Bearish

Resistance: 435-437 ½ ***, 443-448 ¼ ***, 459-461 ¼**

Support: 416 ½-420 ¾**, 410 ½**, 399-402 ¾****

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

 

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

CORN (March)

Yesterdays Close: March corn futures closed 3 ¾ cents lower to start the week, trading in a range of 4 ¾ cents on the day.

Fundamentals: Export inspections yesterday came in at 849,226 metric tons, this was just above the top end of expectations from 500,000-800,000 metric tons and up from 683,000 metric tons in the previous week. There was a sale of 102,100 metric tons sold to Mexico. There is nothing new to report in terms of weather or crop development in South America. Fridays USDA report will be the big-ticket item this week as we get final looks at US production. We will continue to compile estimates and hope to have those for you before Friday.

Technicals: If you had sold the 50-day moving average last week near 354, yesterday’s action gave you an opportunity to reduce or clear the slate. Support has held on the first test which comes we have been defining as 345-346 ½. We continue to feel there is an opportunity to be a trader a nickel on either side of 350 as that has been the trend for front month contracts; 350 was a magnet for December futures too. At the bottom end of the range we are changing our bias from neutral/bearish to neutral. If you want to be long this market, this isn’t a terrible spot; you just need to have your risked managed because a close below contract lows opens the door to another 10 cents lower.

Bias: Neutral

Resistance: 354 ¼-355 ¼***, 360-361 ¾***, 375****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Yesterdays Close: March soybean futures closed 2 ¾ cents lower yesterday, trading in a range of 11 cents on the session.

Fundamentals: Yesterdays export inspections came in at 1,183,089 metric tons, this was within the expected range from 1,000,000-1,300,000 metric tons and was identical to the previous weeks 1,139,436 metric tons. There were sales of 132,000 metric tons to unknown and another 120,000 metric tons to Egypt. South American weather and crop development will continue to be monitored, there is nothing new to report this morning. Fridays USDA report will be what traders and other market participants are really looking forward to, this will give us a final look at US production and hopefully more clarity on market direction.

Technicals: The market has not made it easy for short term futures traders as we have been in a whipsaw trade. Trading in wider ranges intraday, only to finish closer to unchanged over the previous three sessions. We feel the market is in a bit of a “no man’s land” here but like the prospects of higher prices. We aren’t’ the most enthused about futures here but think cheap call options are a viable way to play the market here. If the market were to breakdown closer to 950 ahead of the report, that is the spot to consider futures. On the resistance side, we don’t really have an interest in looking short until we see how resistance holds up from 986-989. This pocket represents the 50% retracement from the June lows to the July highs, as well as the 50 and 100 day moving average.

Bias: Neutral

Resistance: 971 ¾**, 985 ¼-986 ½***, 999-1004**

Support: 950-952 ¼***, 937 ½***, 922 ¼****

 

WHEAT (March)

Yesterdays Close: March wheat futures finished the first day of the week down 4 cents, trading in a range of 6 ½ cents on the session.

Fundamentals: Export inspections yesterday morning came in at 234,418 metric tons, this was towards the low end of the expected range from 200,000-400,000 metric tons and was also below the previous weeks 274,000 metric tons. Cold and dry weather helped support the market last week, but that premium is slowly working its way out of the market. This is so far fitting in with the 15-year seasonal trade we mentioned at the start of the year. If you had sold wheat on January 3rd and bought back on January 16th, you would have been profitable for 12 of the last 13 years with the average gain being roughly 17 cents.

Technicals: The market failed to get out above the 50-day moving average last week with conviction which kept the bear camp in control. The evaporation of weather premium has prices coming back near first technical support. 416 ½-420 ¾ is the first pocket we are looking at. If you had sold the seasonal/technical resistance, this is the area you want to look at reducing or flattening. A break and close below could open the door to extended pressure towards 410 ½, a retest of the December 12th contract lows.

Bias: Bearish

Resistance: 435-437 ½ ***, 443-448 ¼ ***, 459-461 ¼**

Support: 416 ½-420 ¾**, 410 ½**, 399-402 ¾****

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

CORN (March)

Last Weeks Close: Corn futures finished the first week of the year up ¼ of a cent, trading in a range of 4 ½ cents. Fridays Commitment of Traders report showed funds reduced their net short position by 8,957 contracts, putting their net short at 189,536 futures.

Fundamentals: This week’s focus will be on Fridays USDA report which has the potential to give us new direction. We will continue to compile estimates and have those for you in the coming days. Weather and crop development in South America continues to be a big catalyst for the market. Corn used for ethanol production has been a nice silver lining for the market, but the strong trend took a step back last week. Corn use for ethanol dropped from 112.4 million bushels down to 106.5mb. Weekly exports were also dismal last week with a read of 101,200 metric tons, this compares to the expected range from 600,000-900,000 metric tons and the previous weeks read of 1,245,500 metric tons.

Technicals: On the technical side of things, the market has been in a narrow range for several months. We have been in the camp of playing a nickel on either side of 350 until we get a new fundamental catalyst to give us a breakout or breakdown. First technical resistance for Mondays trade will come in at 354 ½. Until we see consecutive closes above, bullish expectations should be tempered. If the market can achieve a conviction close above, we could see short covering from funds to 359 ¼-360 ½. This pocket represents a key Fibonacci retracement, the December 4th highs, and the 100-day moving average.

Bias: Neutral/Bearish

Resistance: 354 ¼-355 ¼***, 360-361 ¾***, 375****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Last Weeks Close: March soybean futures finished the week up 7 ¼ cents, trading in a range of 18 ¼ cents. Fridays Commitment of Traders report showed funds extended their net short position to -87,834, an increase of 16,457 futures from the previous week.

Fundamentals: Soymeal and oil helped offer support to soybeans last week, but this week’s focus will be on the USDA report which will be released on Friday at 11 am cst. We will continue to compile estimates and have those for you in the coming days. Weather and crop development in South America will also continue to be a key catalyst; there is not much new news on that front to report this morning. Weekly export sales last week came in at 554,000 metric tons, this was a hair below the low end of expectations.

Technicals: The market has managed to stabilize well following a dramatic uninterrupted 68 cent meltdown in December. Significant resistance comes in from 985 ½-990. This pocket represents the 50 and 100 day moving average, as well as the 50% retracement from the June lows to July highs. If the market can achieve consecutive closes above this pocket, we expect to see short covering from the funds get us back above the $10 handle.

Bias: Neutral

Resistance: 985 ¼-986 ½***, 999-1004**

Pivot: 971 ¾

Support: 950-952 ¼***, 937 ½***, 922 ¼****

 

WHEAT (March)

Last Weeks Close: March wheat futures finished last week up 7 cents, trading in a range of 9 ½ cents. Fridays Commitment of Traders report showed that funds reduced their net short by 16,537 which puts their net short at 135,523.

Fundamentals: Colder and dryer temperatures have offered support to the market, but seasonal weakness continues to reign supreme. If you had sold March wheat on January 3rd and bought in back on the 16th, you would have been profitable for 12 of the last 15 years with the average gain being roughly 17 cents. Fridays USDA report will be the highlight of the week, we would not be surprised to see some position squaring ahead of that.

Technicals: We have been referencing the 50-day moving average for months now as key resistance. The market is lingering right around it as we were not able to see a convincing trade above it yet. If we start to see consecutive closes above, we could see short covering towards 447 ¼. We are tempering the expectations and siding with the seasonal trend and looking at the sell side at these levels. First support comes in from 416 ½-420 ¾. If you were able to sell against resistance last week, this is the area you want to look at reducing.

Bias: Bearish

Resistance: 435-437 ½ ***, 443-448 ¼ ***, 459-461 ¼**

Support: 416 ½-420 ¾**, 410 ½**, 399-402 ¾****

 

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

BrokersEDGE Grain recap 1-5-18

CORN (March)

March corn futures finished the first week of the year up ¼ of a cent, trading in a range of 4 ½ cents over the four sessions. Fridays Commitment of Traders report showed that funds bought back 8,957 contracts, reducing their net short position to 189,536. This was the second consecutive week that funds reduced; three is a trend. The focus this week will be on Fridays USDA report, we will be compiling estimates and making those available by midweek. On the technical side of things, the market has been in a narrow range for several months. We have been in the camp of playing a nickel on either side o f 350 until we get a new fundamental catalyst to give us a breakout or breakdown. First technical resistance for Mondays trade will come in at 354 ½. Until we see consecutive closes above, bullish expectations should be tempered. If the market can achieve a conviction close above, we could see short covering from funds to 359 ¼-360 ½. This pocket represents a key Fibonacci retracement, the December 4th highs, and the 100-day moving average.

SOYBEANS (March)

March soybeans finished last week’s session up 7 ¼ cents, trading in a range of 18 ¼. Fridays Commitment of Traders report showed funds sold 16,457 futures, extending their net short position to 87,834 futures. This is the most bearish they have been sine June/July (where we bottomed). As with the other grain markets, the focus this week will be on Fridays USDA report which will be released at 11am cst. We will continue to compile estimates and have those for you by midweek. Technically speaking, the market has stabilize well following a dramatic uninterrupted 68 cent meltdown in December. Significant resistance comes in from 985 ½-990. This pocket represents the 50 and 100 day moving average, as well as the 50% retracement from the June lows to July highs. If the market can achieve consecutive closes above this pocket, we expect to see short covering from the funds get us back above the $10 handle.

WHEAT (March)

March wheat futures finished last week’s trade up 7 cents, trading in a range of 9 ½. Fridays Commitment of Traders report showed funds bought back 16,537 futures, reducing their net short to 135,523 contracts. Cold and dry weather have helped support prices, but it will still be a while longer before we see the true effects of that. Seasonally, this is a weak time of the year for wheat futures; we sent out a 15-year seasonal statistic in last week’s report referencing that. We have been referencing the 50-day moving average for months now as key resistance. The market is lingering right around it as we were not able to see a convincing trade above it yet. If we start to see consecutive closes above, we could see short covering towards 447 ¼. We are tempering the expectations and siding with the seasonal trend and looking at the sell side at these levels.

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

CORN (March)

Yesterdays Close: March corn futures closed down 2 cents, trading in a range of 3 ¼ cents on the day. Funds were estimated sellers of 5,000 contracts on the session.

Fundamentals: Export sales this morning came in at a dismal 101,200 metric tons, this compares with the expected range form 600,000-900,000 metric tons and last week’s 1,245,500 metric tons. Yesterday’s weekly EIA inventory data showed that ethanol production was down from 1.090 million barrels a day to 1.032 million barrels per day. Ethanol has been a silver lining for the corn market, the overall trend has been stronger so this week’s read is more of an outlier, if weakness becomes a new trend then we will have some issues. Market participants are continuing to watch weather and developments in South America, there is nothing new to report on that front this morning. Next week’s USDA report is arguably the most important fundamental catalyst on the horizon as we will get a good deal of updates. We will start compiling estimates and have them in next week’s reports.

Technicals: We saw a lot of folks get excited about corn earlier in the week while we were waving the caution flag suggesting you trade the market you have not the one you want. The market failed at the 50-day moving average which will continue to be first resistance, we have not seen a conviction close above this technical since July; this comes in at 354 ½ today. We continue to believe a nickel on either side of 350 represents opportunity, until we get a fundamental catalyst to give us a breakout or a breakdown. Volatility has been extremely light which gives a tremendous opportunity in the options market.

Bias: Neutral/Bearish

Resistance: 354 ¼-355 ¼***, 360-361 ¾***, 375****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Yesterdays Close: Soybean futures closed 1 ¾ cents lower yesterday, trading in a range of 9 ¾ cents on the day. Funds were estimated sellers of 3,000 contracts on the session.

Fundamentals: Export sales this morning came in at 554,000 metric tons, this compares with the expected range from 600,000-900,000 metric tons; last week’s export sales came in at 974,696 metric tons. Soymeal and soy oil are trading higher this morning which are offering support to futures, we will want to see volume confirm price on the floor open. Weather in South America will continue to be important going forward as they round out planting and get into crop development. There are no new updates this morning on that front. Next week’s USDA report will be a major catalyst for setting the tone to start the year, that is on the 12th and we will start providing estimates towards the middle of next week.

Technicals: Soybeans have been more or less consolidating between 960-970 after a bloodbath in the back half of December. The bulls still have a lot of work to do on the chart to get in good graces. A close above 971 ¾ opens the door to 985 ½-986 ½. This pocket represents the middle of the 100-day moving average and the 50% retracement from the June lows to the July highs. This will be a significant pocket before and after the USDA report. The chart remains bearish, but for those who want to be long into the report we have been recommending shopping for cheap call options over the week as it gives great exposure with limited risk.

Bias: Neutral

Resistance: 985 ¼-986 ½***, 999-1004**

Pivot: 971 ¾

Support: 950-952 ¼***, 937 ½***, 922 ¼****

 

WHEAT (March)

Yesterdays Close: Wheat futures closed 1 ½ cents lower yesterday, trading in a range of 5 on the day. Funds were estimated to have been sellers of 2,000 contracts for the session.

Fundamentals: Export sales this morning came in at 131,000 metric tons, this compares with the expected range from 225,000-500,000 metric tons and last weeks 487,352 metric tons. Colder and drier weather has been offering some support, but the damage may not be known until winter wheat comes out of dormancy. Keep in mind that we are also in a seasonally weak time of year. If you had sold March Chicago wheat on January 3rd and bought back on the 16th, you would have been profitable for 12 of the last 15 years with the average gain being nearly 18 cents. Some of that seasonality is likely due to weather premium coming in ahead of time and then going out.

Technicals: Wheat futures closed above the 50-day moving average for the first time in a long time earlier in the week, but it is not what we consider a “conviction close” as it more or less lingers right alongside it. If the market can achieve a conviction close above, we could see short covering come into the market to 447 ¼. We still like the bear side of the market but have been more than nimble with our first recommendation in weeks coming in this week to sell from 433-437. We have since reduced and would be looking to step back in on a confirmation of a failure here.

Bias: Bearish

Resistance: 435-437 ½ ***, 443-448 ¼ ***, 459-461 ¼**

Support: 429**, 416 ½-420 ¾**, 410 ½**, 399-402 ¾****

 

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

CORN (March)

Yesterdays Close: March corn futures finished the day down ¼ of a cent, trading in a range of 2 ½ cents on the day. Funds were estimated sellers of 3,500 contracts.

Fundamentals: Corn futures continue to trade in a tight range thanks to the lack of new news coming across the wires. Export sales to start the week were within expectations at 683,898 metric tons. The bulls in the market will want to see better than expected exports on a consistent basis to get the market headed north. Due to the New Years holiday, we will have export sales out tomorrow morning. Ethanol numbers will be out later this morning, we have been seeing strong numbers in production over the last several weeks.

Technicals: Trade the market you have, not the one you want. March corn futures tested the 50-day moving average yesterday but ran out of gas to get out above which led to some light selling pressure in the back half of the day. This has been a key indicator for us as we have been able to see the market close above since July. If the market does achieve a close above resistance, we could see funds cover to 360 ¾. With that said, we are trusting the technical with tight risk measures and using this as an opportunity to sell. We continue to believe that there is an opportunity to trade a nickel on either side of 350 until we get a fundamental catalyst to give us a directional move other than sideways.

Bias: Bearish

Resistance: 354 ¼-355 ¼***, 360-361 ¾***, 375****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

SOYBEANS (March)

Yesterdays Close: March soybean futures finished yesterdays session up 3 ½ cents, trading in a range of 6 ½ cents on the day. Funds were estimated buyers of 3,000 contracts.

Fundamentals: The market has managed to stabilize from chatter of weather concerns in South America, particularly in Argentina as the next 7-10 days looks dry. Wet weather is expected to move in after that, but the market is waiting for confirmation as we get closer. Many market participants will be waiting for next weeks USDA report on the 12th for nod on direction for the start of the year.

Technicals: The market has stabilized, but don’t think that the chart has instantly turned friendly. The selloff in December has left a lot of technical damage on the chart. Our first pocket of technical resistance remains intact from 967 ¾-971 ¾. If the bulls can chew through and close above, we could see a run back towards 985 ½-986 ½ before next weeks USDA report on the 12th. A failure to close will likely lead to funds extending their net short position. First technical support comes in from 950-952 ¼, a break and close below opens the door to a more significant 937 ½.

Bias: Neutral/Bearish

Resistance: 967 ¾-971 ¾**, 985 ¼-986 ½***, 999-1004**

Support: 950-952 ¼***, 937 ½***, 922 ¼****

WHEAT (March)

Yesterdays Close: March wheat futures closed up ¾ of a cent yesterday, trading in a range of 5 cents for the session. Funds were estimated buyers of 2,500 contracts.

Fundamentals: Concerns over winter kill have helped revive the wheat bulls, but those expectations should be tempered as we will not see the full affect until the crop comes out of dormancy in the spring. Kansas City wheat will be the contract you will want to keep a close eye on for that. Crop progress conditions showed a big drop in the December good/excellent ratings in Kansas (14%), Oklahoma (15%), Nebraska (13%), Colorado (12%).

Technicals: Wheat managed to close above the 50-day moving average, but failed to close above technical resistance at 437. The lack of conviction and follow through yesterday has some sellers stepping back into the market in the early morning session. We are looking for the market to retreat from here, the first line in the sand is 429, but the more significant support pocket comes in from 416 ½-420 ¾. Keep in mind that yesterday was the start of the seasonal; if you had sold March Chicago wheat on January 3rd and bought back on January 15th, you would have been profitable for 12 out of the last 15 years with the average gain being roughly 17 ¾ cents.

Bias: Bearish

Resistance: 435-437 ½ ***, 443-448 ¼ ***, 459-461 ¼**

Support: 429**, 416 ½-420 ¾**, 410 ½**, 399-402 ¾****

BrokersEDGE News and research 1-3-18 Grains

*Wheat seasonal starts today

CORN (March)

Yesterdays Close: March corn futures finished the first trading day of the year up 2 ¼ cents, trading in a range of 3 ½ cents on the day. Funds were estimated buyers of 5,500 contracts.

Fundamentals: Export sales yesterday morning came in at 683,898 metric tons, this was within the expected range from 575,000-800,000 metric tons. Cold weather sparked some concern and put some premium into the wheat market which likely spilled over to support corn in the first trading day of the year. The overhang of ample supplies could keep a lid on any significant rally until we get updated news on that front, that could come in the January 12th USDA report. This report holds a lot of information, so it could set the tone for the first half of the year. There is not much new news to report this morning on the weather and crop development in South America.

Technicals: The market has worked its way back to the 50-day moving average, an indicator we have been referencing as resistance for months. We have tested this indicator a handful of times in the last two months but have not been able to see a conviction close above to encourage fund short covering. We have been suggesting there is opportunity to trade a nickel on either side of 350 and here we are. 350 has been a magnet for front month futures over the past several months and we see that continuing until we get a fundamental catalyst to give us new direction (other than sideways).

Bias: Bearish

Resistance: 354 ¼-355 ¼***, 360-361 ¾***, 375****

Support: 345-346 ½**, 334-335 ¼***, 323-325 ¼**

 

SOYBEANS (March)

Yesterdays Close: March soybean futures closed up 3 cents to start the year, trading in a range of 11 ¼ cents. Funds were estimated buyers of 2,500 contracts.

Fundamentals: Export inspections yesterday morning came in at 1,139,436 metric tons, this was within the expected range from 1,100,000-1,300,000 metric tons. Bulls need to see better than expected export sales on a consistent basis to really get the market going in 2018. Weather and crop development in South America will continue to be a key catalyst in the intermediate term, there is not much new news to report on that front today. Many market participants will be looking forward to the January 12th USDA report, this is typically a big one and could set the tone for the first half of the year. We will start compiling estimates over the next week.

Technicals: Soybeans gaped higher to start the year and had a choppy first session of the year. First technical resistance remains intact, that comes in from 967 ¾-971 ¼. This is being tested in the early morning session but will need to see more volume for confirmation. If the bulls can achieve a close above this pocket, we could see a continuation towards 985 ¼-986 ½. This pocket represents the 50% retracement form the June lows to the July highs, it also contains the 100-day moving average and was the breakdown point on December 14th. On the support side of things, 950-952 ¼ is the first area; a break and close below opens the door to another leg lower towards 937 ½.

Bias: Neutral/Bearish

Resistance: 967 ¾-971 ¾**, 985 ¼-986 ½***, 999-1004**

Support: 950-952 ¼***, 937 ½***, 922 ¼****

 

WHEAT (March)

Yesterdays Close: Wheat futures closed up 7 cents to start the year, trading in a range of 8. Funds were estimated to have been buyers of 5,000 contracts on the session.

Fundamentals: A seasonal wheat trade starts today; if you had sold March wheat on January 3rd and bought back on January 16th, you would have been profitable for 12 of the last 15 years with the average gain being roughly 17 ¾ cents. This brutal cold has been supportive of wheat futures as concerns of winter kill add some premium to the market. Weather patterns are “warming” up so it will be interesting to see if this premium comes back out of the market ahead of the January 12th USDA report. Yesterday’s export inspections came in at 274,506 metric tons, this was below the expected range from 300,000-600,000 metric tons. The bulls really need to see better exports in the first half of the year to really get something going. Ample global supplies continue to keep a lid on any significant rallies of the last six months.

Technicals: The market has works its way back to the 50-day moving average which has been an indicator we have been referencing for several months now as the market has not been able to get a conviction close above here for many months. We view this as an opportunity to sell on the first test. Consecutive closes above here opens the door to some additional short covering into the USDA report on the 12th. The next resistance pocket comes in from 443-448 ¼ which represents previous resistance and the 100-day moving average. If the market fails to breakout we will be looking for a retreat back to 416 ½-420 ¾.

Bias: Bearish

Resistance: 435-437 ½ ***, 443-448 ¼ ***, 459-461 ¼**

Support: 416 ½-420 ¾**, 410 ½**, 399-402 ¾****

For more information please contact DAW Trading at brokersedge@dawtradingdiv.com or at 877-329-0006 and visit us at http://dawtradingdiv.com/brokers-edge/

Disclaimer:

Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. DAW Trading (“DAW”) uses various outside sources for research material regarding futures and options on futures trading therefore the views and opinions expressed in this letter may not necessarily reflect the view of DAW or its staff. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to DAW.

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