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Session Close: December corn futures closed 2 ¾ cents higher yesterday, trading in a range of four cents. Funds were estimated to have been buyers of 5,000 contracts.
Fundamentals: Corn managed to trade higher yesterday on some concerns over the back half of harvest. Weather has been less than ideal for the areas that are lagging the five-year average with rain, wind, and snow adding some stress to an already stressful time of year. Yesterday’s weekly ethanol report from the EIA showed ethanol production rose by 17,000 barrels per day but total stocks were up 400,000 to 21.5 million barrels. Export sales this morning came in at 811,400 metric tons, this compares with the expected range from 800,000-1,100,000 metric tons. FCStone released their yield estimates yesterday and have the corn pegged at 173.7 well above the 162.8 they had published in August. Informa Economics will be releasing their estimates today
Technicals: Yesterdays price action was very constructive as the market managed to make a second higher low from the August 12th low. If the bulls can achieve a close back above the 50-day moving average a post a second higher high above 355 ¼, we could see funds start to cover. Whether you are a bull or a bear, you have an opportunity here as we linger in the middle of a well-defined trading range which means well defined risk. We are shifting our bias from bearish to neutral and would not be opposed to looking long so long as yesterday’s lows can hold. We will need to see more confirmation to change that to outright bullish.
Resistance: 351 ½**, 355¼***, 360-362***, 372-375**
Support: 342 ½-344 ¼**, 334-335 ½***
Session Close: November soybean futures closed 6 cents higher yesterday, trading in a range of 11 ¼ cents on the session. Funds were estimated buyers of 6,000 contracts.
Fundamentals: Yesterdays crush report came in at 145.37 million bushels, this was in line with the consensus from analysts which is up just over 5% from last year. This morning’s export sales came in at 1,967,000 metric tons, this came in above the top end of the expected range from 1,45,000-1,850,000 metric tons. FCStone released their updated yield projections yesterday, that came in at 49.9 which is in line with average estimates; this compares with their August estimate of 47.7 bushels per acre. Informa economics will be releasing their estimates today and we will get a USDA update next Thursday. We will continue to keep an eye on South America as they continue to plant and enter the crop development stages. Due to early delays, producer selling has been slow with only 17.7% of their crop sold, this compares with their five-year average of 30%.
Technicals: The market has held technical support nearly perfectly which keeps the bulls in control. The market is using that momentum to trade higher this morning, but market participants will want to see volume confirm price on the open. Technical resistance was tested early this morning, that has come in from 999 ¼-1004 ¾ for us. If the market can chew through this pocket, we could see funds extend their long position and press prices to 1021 ¼. The trend is your friend until the end when it bends and the trend over the last two and a half months has been higher lows and higher highs.
Resistance: 999 ¼-1004 ¾**, 1014**, 1021 ¼****
Support:981 ¾-984 ¾**,977***, 968 ¼**, 957-963 ¼****
Session Close: December wheat futures closed 1 ¾ cents lower yesterday, trading in a range of 5 ½ cents. Funds were estimated to have been even on the day.
Fundamentals: Finding new news and bullish tidbits has been like finding a needle in a haystack as of late. Export sales this morning came in at 347,800 metric tons, this compares with the expected range from 250,000-450,000 metric tons. The market really needs to see export demand pick up to help provide a fundamental floor in the market. The dollar may have run out of steam fundamentally and technically, if the dollar continues to retreat off of technical resistance we could see that offer minor support to the wheat market.
Technicals: The wheat market is trading higher this morning, the good news along with that is that it appears the sun is going to come up too (although foggy). Yesterdays close marked the sixth consecutive close lower as the bears continued to add to short positions. Even with the long string of negative closes, the RSI (relative strength index) did not breach 30. A reading below 30 typically indicates that the market has exhausted itself on the sell side. Technical support remains at 415 with resistance at 422 ½, this was previous support.
Resistance:422 ½***, 438 ¾-441***, 462 ¾**, 478-479****
Support: 415 ¼**, 399-402 ¾****, 390-392 ¼**
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