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Fridays Close: March corn futures finished Friday up 1 cent, trading in a range of 2 ¾ cents. Funds were estimated to have been buyers of 3,500 contracts.
Weekly Close: On the week, March corn futures finished 6 ½ cents lower and traded in a 10-cent range for the week. Fridays commitment of trader’s report showed that funds hold a net short position of 160,519 contracts, this versus laws weeks -196,763; a reduction of 36,244. Keep in mind that this data is compiled through Tuesday. We saw the funds holding a record net short position of 230,556 in the middle of November, that position has decreased 70,037 or 30%.
Going Forward: Corn has been range bound for the better part of the last three months which has presented some great opportunities for traders who recognized a sideways trend and weren’t sidetracked from the hope of a breakout. First technical resistance we will be watching next week comes in from 358-360 ½. On the support side of things, we are watching 348 ¾-350. Keep in mind tat we do have a USDA report on Tuesday, although we are not expecting any significant changes, there could be a pop in volatility. Carryout will be the headline number. The range of estimates comes in from 2.394-2.517, the average being 2.478.
Resistance: 358-360 ½****, 369 ¼-370 ½***, 375****
Support: 348 ¾-350**, 334-335 ½***, 323-325 ¼**
Fridays Close: January futures finished Fridays session down 1 cent, trading in a range of 10 ½ cents on the day. Funds were estimated sellers of 5,000 contracts.
Weekly Close: For the week, January soybean futures were a modest 3 ¼ cent lower after trading in a range of 29 cents. Fridays commitment of trader’s report showed that funds have a net long position of 54,885 contracts; this is up 24,840 from last week’s 30,045 (keep in mind the CoT data is compiled through Tuesday).
Going Forward: As with corn, soybeans have been range bound for the better part of the last three months, just a much wider range. The market has been finding support from the 50 and 100 day moving average as well as the 50% retracement (middle of the range) for the year. That has come in from 981-988 depending on the day (moving averages move). 984 ¾ is the 50%. Although we finished off of the highs this week we managed to make higher highs and are so far holding higher lows. With possibly weather concerns in South America we continue to have a bullish tilt to the market. We do have a USDA report on Tuesday, carryout will be the number closely watched. The estimates range from .425-.486 with the average estimate at .438.
Resistance: 999-1004**, 1015**, 1021 ½****, 1036-1041**
Support: 981-984 ¾***, 977 ¼**, 967-968 ¼****
Fridays Close: March wheat futures finished Fridays session down 3 ½ cents, trading in a range of 7. Funds were estimated sellers of 3,000 contracts.
Weekly Close: Wheat futures closed lower every day last week, taking of 20 ¾ cents from the previous weeks close. The weekly range was not much bigger at 25 ¼ cents. Fridays commitment of Traders report showed that funds bought 4,087 contracts (CoT data compile through Tuesday). This puts their net short position at 122,379.
Going Forward: We have been hammering the short side pretty hard over the past several weeks in our daily reports and have even went as far as calling for a $3 handle. Fundamentals and technicals have kept a lid on this market for the back half of the year and we expect that to continue. With that said, there is a chance we could see some short covering after last weeks selling pressure. Suggesting there could be short covering is very different than saying we are buyers. We will continue to use short covering rallies as opportunities to sell. We get an update from the USDA on Tuesday, carryout will be the one traders will be watching closely. The estimated range from .925-.960 with the average estimate at .938.
Resistance: 424 ¼**, 430 ½-433 ½**, 443-445¾ ****
Support: 412 ¾**, 399-402 ¾****
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