BrokersEDGE Futures Trading Newsletter 12-1-17 Grains, Corn, Soybeans, Wheat futures

CORN (March)

Yesterdays Close: March corn futures closed 3 ¾ cents higher yesterday, trading in a 5-cent range on the day. Funds were estimated buyers of 9,000 contracts on the day.

Fundamentals: Yesterdays export sales came in at 599,000 metric tons, this was below the expected range from 700,000-1,100,000 metric tons. Some of the rally this week could be funds tying up loose ends at the end of the month, not just in corn but also wheat and soybeans. South American crop development will likely have the most influence on the market over the next month. There are talks of La Nina like conditions which could lead to a drier condition in some key areas, this would have the potential to drag the yield numbers down and put a premium in prices. Planting progress in Argentina has been lagging the average, but is not to a significant point of concern at this moment. BAGE shows 38% vs 43% for the same time last year.

Technicals: The market made its way out above 354 yesterday which encouraged additional short covering and potentially new buying. 358-360 ¼ is the significant resistance pocket the bulls want to see a close above. This represents the top end of the recent range and the 50-day moving average, an indicator the market has struggled to get out above since July. Consecutive closes above could encourage additional short covering from funds as this would mark higher highs after marking higher lows at the beginning of the week. This would not confirm a trend reversal but is certainly a step in the right direction for the bulls and producers.

Bias: Bearish

Resistance: 358-360 ¼****, 367-369 ¼**, 373 ½-375****

Support: 348 ¾-350**, 334-335 ½***, 323-325 ¼**


SOYBEANS (January)

Yesterdays Close: January soybean futures finished the day 6 ¾ cents lower, this after trading in a range of 8 cents on the day. Funds were estimated sellers of 6,000 contracts on the day.

Fundamentals: Yesterdays export sales came in at 943,000 metric tons, this compares to the expected range from 800,000-1,200,000. Although it is within the range, it is on the low end of what we have seen over the past several weeks. The bulls will want to see numbers come in closer to the top end of the range to encourage additional strength in the market. Market participants will also be keeping a close eye on developments in South America. Planting in Argentina is a behind the average pace but is not anything of major concern at the moment. BAGE shows 42% vs the 46% we saw for the same time last year. Weather forecasts in Argentina and Brazil will be watched closely as they could have implications on production and therefore price.

Technicals: Soybean futures traded down to first technical support in yesterday’s session, this comes in from 981 ½-986 ¼. This is a wider pocket than we typically like but there’s a lot going on in this area. A few of the indicators within this range include the 50 and 100 day moving average, as well as the 50% retracement from the June lows to the July highs which is also the range of the whole year. If the market continues to see weakness and we close below, we will likely see a retest of the bottom end of the range. 968 ¼ is the next line in the sand if we do see long liquidation. If the market can hold, that will invite buyers into the market in an attempt to stage a breakout above the $10 handle.

Bias: Neutral/bullish

Resistance: 999-1004 ¾***, 1014**, 1021 ½****

Support: 981 ½-986 ¼***, 968 ¼****, 957-963 ¼****


WHEAT (March)

Yesterdays Close: March wheat futures closed 2 ¾ cents lower yesterday, this after trading in an 8 ½ cent range. Funds were estimated buyers of 1,000 contracts on the day.

Fundamentals: Yesterdays export sales came in at a dismal 184,000 metric tons; this was the lowest sale in 15 years for this time of year. The expected range was for 240,000-450,000 metric tons. We have been talking about ample supply and poor demand being a burden on this market and we expect that to continue over the intermediate term. The bulls need to see a trend of higher demand in order to spark some new buying interest.

Technicals: The market managed to rally for 95% of the day following the weak export data in the morning. Much of this was likely just short covering from the funds into the end of the month. The bears came in hard at the close to push prices in the red. Some of that weakness has carried over into the early morning trade, but the floor open will be more telling as volume confirms price. 445-449 ¾ is significant resistance; until the bulls can achieve consecutive closes above this pocket, the bears will remain in control and rallies are to be sold.

Bias: Bearish

Resistance: 445-449 ¾ ****, 452 ¾**, 469 ¾***

Support: 428*, 422 ½***, 412 ¾**, 399-402 ¾****



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