BrokersEDGE Commodity Futures news and research letter 2-7-19

March Corn Futures Trading
Yesterday’s Close: March corn futures finished yesterday’s session down ½ of a cent, trading in a range of 1 ¾ cents.
Fundamentals: Export sales this morning came in at 503,100 metric tons (for week ending 12/27). Tomorrow’s USDA report will hopefully be the catalyst to get this market moving again (in any direction). U.S. production estimates are coming in and range from 14.343-14.760 billion bushels. Yield estimates are coming in from 176.5-180.0 bushels/acre. U.S. ending stocks are projected to come in anywhere from 1.621-1.787 billion bushels.
Technicals: If you saw yesterday’s trading range, you probably know that nothing has changed on the technical front. The market continues to be a stick in the mud. Support and resistance pockets have remained intact for the better part of the last 3 weeks. We see that support coming in from 375 ¾-378 ½. On the resistance side of things, 382-384 ½. A breakout or breakdown opens the door for an additional 5 cents in short order.
Bias: Bullish
Resistance: 382-384 ½**, 388-390 ½****
Support: 375 ¾-378 ½***, 371 ¾-372 ½****

March Soybean Futures trading
Yesterday’s Close: March soybean futures finished yesterday’s session up 1 cent, trading in a range of 5 cents.
Fundamentals: Export sales this morning came in at 1,050,000 metric tons (for week ending 12/27). The big-ticket item this week will be tomorrow’s USDA report. Early estimates for U.S. production range from 4.490-4.620 billion bushels. Yield estimates range from 51.0-52.5 bushels per acre. The average estimate for U.S. ending stocks is near .925 million bushels. We would not be surprised to see the market retreat initially but feel a pullback would be a buying opportunity. Once the report is behind us, attention focus back on trade talks with china, which are expected to continue next week. We will look for a silver lining to emerge from that.
Technicals: With the market little changed and in a tight range yesterday, many of the technicals remain intact from yesterday’s report. The market continues to hover around the 200-day moving average and key retracement from 919-921 ¾, a pivot pocket for us. First meaningful support comes in from 910 ¾-913 ¼. If the market breaks below here, we could see prices work towards 897-899 ½. This is a pocket where we would want to be aggressive buyers on the first test.
Bias: Bullish
Resistance: 931 ¼**, 941-947****
Pivot: 919-921 ¾
Support: 910 ¾-913 ¼***, 897-899 ½****

March Wheat Commodity Futures
Yesterday’s Close: March wheat futures finished yesterday’s session down 3 ¼ cents, trading in a range of 7 cents.
Fundamentals: Export sales this morning came in at 593,000 metric tons (for week ending 12/27). Market participants are looking forward to tomorrow’s USDA report. The average analyst estimates for U.S ending stocks comes in at .989 billion bushels. Total wheat acres are estimated to be 32.128 million. We will be watching corn and beans close for the remainder of the week as it will likely spillover into wheat and provide a headwind or a tailwind for prices.
Technicals: The market made higher highs yesterday, only to finish on the lows of the session. That reversal is cause for concern in the very near term, but we will be looking to be buyers on a deeper correction (for the KC contract too). First support this morning comes in from 515 ¼-518 ½. If the bulls can defend this, it will continue the trend of higher lows.
Bias: Neutral/Bullish
Resistance: 529-532***, 537 ¾-541 ¾****
Support: 515 ¼-518 ½*** 508-510**, 499-501 ¼****

March E-mini S&P Futures trading
Yesterday’s close: Settled at 2729.50, down 1.50
March E-mini S&P Futures trading Fundamentals: U.S benchmarks are seeing a healthy paring of gains this morning after stalling at a strong level of resistance. Much of Asia is on holiday but the Nikkei showed weakness early last night before growth fears crept into Europe, the DAX is down 1.6%. Another quiet catalyst for this morning’s red tape was comments from top Fed officials. Last night, Fed Chair Powell said, “the U.S economy is now in a good place” and Fed Governor Quarles said, “the outlook is very solid” (according to Bloomberg reports. Today’s schedule boasts two more 2019 voting members, Fed Vice Chair Clarida speaks at 8:30 am CT and this evening St. Louis Fed President Bullard speaks at 6:30 pm CT. Dallas Fed President Kaplan, an alternate member speaks at 8:15 am CT. This morning weekly Jobless Claims came in higher than expected, there is a 30-year Bond auction at noon CT and this afternoon Consumer Credit data is due at 2:00 pm CT.
On the earning front, Twitter was the darling of the day for sentiment and it whiffed. The stock is down about 7% premarket. Tyson, YUM!, Kellogg, Philip Morris and many others also all report ahead of the bell. Mattel, Expedia, Motorola and News Corp are only a handful of those who report after the close.
March E-mini S&P Futures trading Technicals: Both the S&P and NQ are testing into first key support levels at 2706-2709.75 and 6933-6943 ahead of the bell this morning. Yesterday’s closing gap in the S&P is quit a bit away but traders still must respect such. The NQ’s gap although further on a percentage basis is easier obtainable. For the S&P, the intraday low over the last two sessions becomes a very near-term inflection point and first key resistance; a failure to get back above here will encourage a wave of selling that likely breaks through the overnight low. We continue to hold a slight Bearish Bias with the belief this rally is exhausted as it tests a crucial extension coupled with the 200-day moving average after proving doubters in the second half of January wrong.
Bias: Neutral/Bearish
Resistance: 2719.50-2721.25**, 2729.50**, 2743-2743.50***, 2751.25***, 2758.25-2763.50**
Support: 2706-2709.75**, 2690-2695**, 2672.50-2677.75***,

March NQ Futures
Resistance: 6995.75-7008**, 7054-7064.25***, 7095**
Support: 6933-6943**, 6858.25-6877.75**, 6810.50-6837.25***

March Crude Oil commodity futures trading
Yesterday’s close: Settled at 54.01, down up 0.35
March Crude Oil commodity futures trading Fundamentals: Crude is lower this morning with strong technical headwinds and growth fears weighing on the tape. Yesterday’s EIA report was neither bearish nor bullish, but the fact is Gasoline inventories remain at a record and the build at Cushing completely offset the draws incurred over the three previous weeks. Along with broader risk-sentiment, we believe the recent rally in Crude Oil must come in.
March Crude Oil commodity futures trading Technicals: First key support comes in at 53.01-53.37 and this is an area that Crude has struggled to stay suppressed below. A close below here though could quickly get the ball rolling down to a support trend line at 51.90. The stall from yesterday, which aligns with today’s session high, comes in at first key resistance at 54.26; a move out above here today will neutralize the weakness and bring a bullish tailwind back to highs.
Bias: Bearish/Neutral
Resistance: 54.26-54.52**, 55.51-55.55***
Support: 53.01-53.37**, 51.90**, 51.33**, 50.63-51.01***

April Gold Commodity Futures
Yesterday’s close: Settled at 1314.4, down 4.8
Fundamentals: Gold trickled lower overnight with Dollar strength weighing heavily on the tape, however, price action tested our “back the truck up” level perfectly. More upbeat comments than recent from Fed Chair Powell played a hand in this. Another component was Europe lowering their growth forecast which strengthened the Dollar. The caveat with this was as soon as we saw a miss on data headlines in the U.S, as we did with Jobless Claims this morning, it allowed Gold to see a relief. Today’s schedule boasts two more 2019 voting members, Fed Vice Chair Clarida speaks at 8:30 am CT and this evening St. Louis Fed President Bullard speaks at 6:30 pm CT. Dallas Fed President Kaplan, an alternate member speaks at 8:15 am CT.
Technicals: Gold may not have completed its consolidation lower, but it was sure important to see it respond on its test to our major three-star, “back the truck up”, level of support at 1306.3-1306.5 and bounce nearly $10. The bounce higher this morning was extremely technical and stalled, in the near-term, directly at the .382 retracement from the newly created range from the highs; a close above here today is bullish.
Bias: Bullish/Neutral
April Gold Commodity Futures Resistance: 1315.8**, 1321.7-1323.4**, 1337**
Pivot: 1312.1
April Gold Commodity Futures Support: 1306.3-1306.5***, 1300.5**, 1281.5-1284.5***

Livestock Futures trading market rap up

LEJ8: -.55 at 127.075, trading in a range of 1.075
LEM8: -.25 at 117.15, trading in a range of .725
GFH9: -.525 at 143.30, trading in a range of 1.475
GFJ9: -.575 at 144.875, trading in a range of 1.375

Cattle futures Commodity trading Commentary: Cattle futures worked lower today on ideas that cash would be steady to slightly higher this week (still at a premium to cash). Today’s Fed Cattle Exchanged sold 161/294 head from 124.00-124.25. There was another pen that was passed on at 124. We continue to believe there will be opportunities for bullish and bearish traders over the near term, anticipating more of a range bound trade (see the Tech Talk section for the full breakdown).

PM Boxed Beef / Choice / Select
Current Cutout Values: / 217.57 / 212.37
Change from prior day: / .55 / (.73)
Choice/Select spread: / 5.20

April Live Cattle commodity Futures
April live cattle pressed up against our resistance pocket for the third consecutive session but failed to attract new buyers into the market. This failure led to a light round of profit taking. Support and resistance levels are little changed from yesterday’s report. The bulls want to chew through 127.80-128.20. If the bulls can achieve this, their next target would be 129.475-130.00. On the flip side, another failure to breakout would likely encourage a bigger round of long liquidation from the back half of last week’s trade. First meaningful support comes in from 125.30-125.75. This pocket represents last week’s lows and the 50-day moving average.
Resistance: 127.80-128.20**, 129.475-130.00**
Support: 126.25-126.70**, 125.00-125.475**

March Feeder Cattle Commodity Futures trading
Feeder cattle failed to gain momentum above resistance in the first half of the week that led to some profit taking yesterday and again today. As with live cattle, we aren’t expecting fireworks in the near term. We continue to believe this market will remain range bound. We have defined that range as 142ish-145ish. This is a very tradable market, but you need to temper the expectations of a bigger directional move.
Feeder Cattle Resistance: 145.275-145.75***, 146.425-147.20****
Feeder Cattle Support: 141.95-142.55**, 140.25-140.80****

April Lean Hog Commodity Futures trading

Yesterday’s reversal following the previous day’s limit up move was the writing on the wall for today’s session. April futures finished the session .05 off of the lows at 60.85. Recent price action continues to suggest that a retest of contract lows is still not out of the question. Significant support tomorrow comes in from 59.65-60.15, the bulls MUST defend this pocket to round out the week.
April Lean Hog Commodity Futures trading Resistance: 63.425-63.80****, 65.65-66.20***
April Lean Hog Commodity Futures trading Support: 59.65-60.15***, 57.80****

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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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