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Yesterdays Close: March corn futures traded lower by ¼ cent yesterday, trading in a range of 2 ¾ cents on the session. Funds were estimated sellers of 1,000 contracts.
Fundamentals: Yesterdays export sales came in at 866,900 metric tons, this was within the range of estimates from 700,000-1,100,000 metric tons and slightly lower than last week’s 876,400 tons. The market is wanting to see a string of better than expected data to start trending prices off of the bottom. We’ve had great ethanol reports recently and in line export expectations, and we are still at contract lows which is concerning for the bull camp. There is some weather premium in the market (though hit doesn’t feel like it since we are at the low), if forecasts turn more favorable for corn we could see more aggressive selling come into the market.
Technicals: 350 has been a magnet for the front month corn contract over the past several months and we think will continue to be. We feel there is opportunity to play a nickel of either side of the market but really want to see a new directional move (other than sideways). 345 is the line in the sand we are watching, if the bears can achieve a break and close below, we could see accelerated selling pressure press prices down towards 335. On the top side, 355-357 ½ is the pocket we would be looking to sell against. This represents recent highs, previous support, and the 50-day moving average, an indicator we have not closed above since July. We remain neutral until we see a change in fundamentals and technical confirmation of a breakout or a breakdown.
Resistance: 355-357 ½ ****, 369 ¼-370 ½***, 375****
Support: 345-348**, 334-335 ½***, 323-325 ¼**
Yesterdays Close: January soybean futures closed 13 cents lower yesterday, trading in a range of 14 ½ cents on the session. Funds were estimated sellers of 9,000 contracts.
Fundamentals: Yesterdays export sales number came in at 1,452,700 metric tons, this was on the low end of the expected range from 1,400,000-2,000,000 metric tons and well below last week’s 2,015,794 metric tons. As with corn and wheat, the market needs to see better than expected export sales to support the market; within expectations doesn’t mean what it used too. NOPA crush today is expected to come in between 161-165 million bushels, this report will be out at 11 am cst. Weather in South America will continue to be important, there are no significant changes in forecasts to report at this moment. Technicals: Soybeans shaved off 13 cents yesterday, marking the sixth close lower in seven sessions. In those seven sessions we have seen as much as 47 ¾ taken off prices from high to low. That brought the RSI (relative strength index) near oversold. The market has found some bargain buying and short covering in the overnight and early morning session. Yesterday we were talking about 967-968 ¼ being significant support and a buying opportunity on the first test. This represents the November 14th lows as well as a key retracement from the June lows to the July highs. This must hold for the bulls; a breakdown below leads to long liquidation and could easily take another 20 cents off prices. On the resistance side of things, there are several hurdles to get over. The first being then 100 and 200 day moving average which was previous support for us, this pocket comes in from 976-978 ¾.
Resistance: 976-978 ¾***, 984 ¾-989**, 999-1004**
Support: 967-968 ¼****, 962 ½-963 ¼**, 947 ½**
Yesterdays Close: March wheat futures closed 2 ¼ cents lower yesterday, trading in a range of 4 ¾ cents on the day. Funds were estimated buyers of 2,000 contracts on the day.
Fundamentals: Export sales yesterday came in at 588,000 metric tons, this was above the range of expectations from 250,000-450,000 metric tons and the biggest read we have seen in over a month. As mentioned with corn and beans, the bulls need to see a trend of better exports, not just one beat a month. We continue to believe that global supplies and poor demand will keep a lid on any significant move to the upside, ultimately creating sell opportunities on bounces.
Technicals: Wheat market staged two consecutive positive closes, this is nothing to get remotely excited about. We continue to feel that rallies are to be sold, but we are waiting for higher prices to add to the short side. 424 ¼ is the first line in the sand with other significant levels coming in nearly 15 cents above that. Any rally will likely be made up of short covering and not new buying. We continue to feel that the market has the potential to see prices with a $3 handle over the intermediate term.
Resistance: 424 ¼**, 430 ½-433 ½**, 443-445¾ ****
Support: 399-402 ¾****, 392-394**, 381-383 ¾***
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