Yesterdays Close:December corn futures finished of a cent lower yesterday, trading in a range of 2 cents.
Fundamentals: Export sales this morning came in at 701,500 metric tons for 2018/2019, within the range of expectations. Attention today will be on the USDA report which will be released at 11am cst. Estimates for yields come in near 180 bushels per acre, putting total production at 14.721 billion bushels. Carryout estimates are near 1.773 billion bushels. We do have a bearish seasonal trade that starts today. If you had sold December corn on November 8th and bought back on November 19th, you would have been profitable for 13 of the last 15 years, the average profit on that has been 11 cents.
Technicals: Yesterdays snooze fest didnt change anything on the technical landscape, so there is nothing new from yesterdays report. The chart is continuing to look constructive, but the bulls need to chew through resistance to really get the party started. We have outlined that as 375 -378 , this pocket represents a key Fibonacci retracement and the October highs. A conviction close above here opens the door for an extension towards 386. On the support side of things, the bulls want to defend 367 -370 through the week. A failure to do so will neutralize our bullish bias.
Resistance: 375 -378 ****, 386-387 ***
Support: 367 -370**, 360 -363 ***, 354 -356 ****
Yesterdays Close:January soybeans finished yesterdays session down 5 cents, trading in a range of 11 cents.
Fundamentals: Export sales this morning came in at 388,400 metric tons for 2018 and 3,000 for 2019/2020, another dismal number. All eyes will now turn towards this mornings USDA report. expectations are for yields to come in near 52.9 bushels per acre, putting production near 4.676 billion bushels. Carryout estimates are coming in near 898 million bushels. We have been leaning on the short side to start the week but will neutralize that up as the technical landscape has shifted (see technical section below). Keep in mind that the big pop last week was on the back of hot air, most of which was short covering. The market has not given that back, and that should be a caution flag for bears.
Technicals: We have been leaning on the bearish side for the past three sessions, but the inability to retreat further has helped stabilize the technical landscape. The market is consolidating sideways to lower, which is forming a bull flag, a bearish technical pattern. This coupled with the overwhelmingly bearish sentiment (fade the crowd) may put near term risk to the upside. Obviously, todays report will have major implications on things, but bears should not get ahead of their skis here.
Resistance: 892**, 900 -906 ****, 932-935 ***
Support: 878-880***, 864 -865 ****, 839 -844 **
Yesterdays Close:December wheat futures finished yesterdays session down 1 cents, trading in a range of 7 cents.
Fundamentals: Export sales this morning came in at 661,200 metric tons, a notch above the top end of expectations (the recent trend). Estimates for ending stocks in todays USDA report are coming in near 958 million bushels. We continue to watch the US dollar very closely as it will have a direct impact on the export market. If the dollar continues to soften up, we would expect to see that put a soft floor in the market. A bearish seasonal trade starts today for Chicago, March wheat. If you had sold on November 8th and bought back on December 11th, you would have been profitable for 13 of the last 15 years, the average gain has been about 13 cents.
Technicals: Yesterdays price action does little to change the technical picture as we approach todays USDA report. Futures are trading near the top end of technical resistance, a pocket that we have defined as 515-519 . A breakout above here could spur a round of short covering from the funds. On the support side of things, 5.00 is both technically and psychologically significant. A breakdown below here could take us closer to contract lows from December. From the risk/reward side of things, we like looking for long exposure here.
Resistance: 515-519 ***, 528-531 ***
Support: 500***, 485 ***, 468 -473 ****