CORN (March)
Yesterdays Close: March corn futures closed 2 ¼ cents lower, trading in a range of 4 cents on the day. Funds were estimated sellers of 9,000 contracts on the session.
Fundamentals: Export inspections yesterday morning came in at 658,403 metric tons, this was within the expected range from 550,000-800,000 metric tons and up 53,274 metric tons from the week prior. Today is the day where we will get some new news across the wires which will be nice, but expectations should be tempered as there is not much in this report. US Ending stocks will likely be the headline number today. The range of estimates for corn come in from 2.394-2.517 with the average estimate at 2.478. The expected range for world ending stocks comes between 195.7-205 mt with the average estimate at 202.72. It probably won’t take too long for the market to digest the numbers, then attention will turn back towards South American weather and crop development.
Technicals: The market has made its way back to the bottom end of the range which would typically be a good place to buy but todays USDA report has us a little more hesitant. We have been seeing the market consolidate and then trade lower, consolidate and then trade lower. We would rather not be caught long if we make that next leg lower, that would likely open the door to 335 and create a new consolidation range from 335 to 345. Sometimes the best trade is no trade. For producers it’s not always that easy and we help with those decisions too. On the resistance side of things, the 50-day moving average has been a major barrier since July. Until the market achieves consecutive closes above, the bears will remain in control. We are pretty neutral this market at this point in time, todays price action could shift that going forward.
Bias: Neutral
Resistance: 358-360 ½****, 369 ¼-370 ½***, 375****
Support: 348-350**, 334-335 ½***, 323-325 ¼**
SOYBEANS (January)
Yesterdays Close: January soybean futures closed 6 ½ cents lower yesterday, trading in a range of 7 ½ cents on the day. Funds were estimated sellers of 7,000 contracts on the session.
Fundamentals: Yesterdays export inspections came in at 1,229,817 metric tons, this was towards the low end of the expected range from 1,100,000-1,600,000 metric tons, and down 572,788 metric tons from the previous week. Today’s USDA report will give the market some new news that isn’t weather related, but we are not expecting too much. US ending stocks average estimate is .438 with the range coming in from .425-.486. World ending stocks expected range is 95.2-99 mt, with the average estimate at 97.82 mt. Once this report is behind us, attention will again turn towards weather and crop development in South America.
Technicals: The market was under pressure to start yesterday’s session, made a run back towards the 50-day moving average but failed which led to some long liquidation from the funds. First support was violated on a closing basis which has put the market back on its heels ahead of today’s USDA report. If the market is not able to reclaim 984 ¾ on a closing basis today, we could see prices retreat back towards the bottom end of the range from 967-968 ¼. We still feel that the market has a bullish tilt, but you need to understand the market has been range bound for the better part of the last 6 months. Not only range bound, but we are basically right in the middle of that range which makes it a little harder for bulls and bears to have loads of conviction.
Bias: Bullish
Resistance: 988 ¾**, 999-1004**, 1015**, 1021 ½****, 1036-1041**
Pivot: 984 ¾
Support: 976-977 ¼**, 967-968 ¼****, 962 ½-963 ¼**
WHEAT (March)
Yesterdays Close: March wheat futures closed 4 cents lower, trading in an 8-cent range on the day. Funds were estimated to have been sellers of 5,000 contracts on the session.
Fundamentals: Yesterdays export inspections came in at 316,86 metric tons, this was on the low end of the expected range from 300,000-500,000 metric tons; this is down 94,107 metric tons from the previous week. This mornings USDA report will give us some new news that perhaps could spark some short covering. US ending stocks is expected to come in from .925-.960 with the average estimate at .938. World ending stocks are expected to come in from 264-270 mt, the average estimate is 267.07 mt.
Technicals: The market has closed lower for six consecutive sessions now, bringing the RSI into oversold conditions. We have been very clear that though we are oversold and could see short covering the only buying we have been considering is short covering. Having a bias and trading that bias saves a lot of headaches instead of getting long when you have a short bias and then being trapped. First technical resistance we are looking at comes in at 424 ¼. The more significant line in the sand doesn’t come in until 443.
Bias: Bearish
Resistance: 424 ¼**, 430 ½-433 ½**, 443-445¾ ****
Support: 399-402 ¾****, 392-394**, 381-383 ¾***
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