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Blue Line Morning Express (Grains)


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We update our research throughout the trading day so be sure to visit the research page on our site!

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CORN (December)

Session Close: December corn futures closed 1 cents lower on Mondays session as they traded in just a 3 cent range.

Fundamentals: With the USDA report behind us, market participants will now shift their focus back on harvest activity through the cornbelt. Yesterdays weekly harvest report showed that we are only 28% harvested, this is 2% slower than most analysts were expecting, and 19% behind the five-year average. Only three states are ahead of pace and they are, North Carolina, Tennessee, and Texas. Although this is the slowest pace since 2009, it doesnt appear the market is too concerned. Drier forecasts over the next 6-7 days should offer a decent opportunity for producers to get back in the field. Yesterdays weekly export inspections were next to pathetic at 322,672 metric tons. This compares with last weeks read of 582,000 metric tons and was well below the estimated range from 600,000-800,000 metric tons. Year to date export inspections are at 3,904,525 metric tons; this is well below the 7,815,471 metric tons we saw for the same time last year.

Technicals: It appears the market has reverted to its old ways of lulling people to sleep. Fridays session offered hope that we could see volatility pick up, but yesterdays session fell short. The market had an inside day (when the market trades within the previous sessions range) and was confined within a 3 cent range. The bears continue to have the advantage but there is certainly a case that the market is more neutral than anything. The bulls need to retake the 50-day moving average, this comes in at 356 this morning, we have not closed above this indicator since July 21st. Just above that is a resistance pocket from 360-362. If the market can find a way to work higher and close above these barriers, we could start to see funds cover (which have a record short for this time of year).

Bias: Bearish

Resistance: 356 **, 360-362***, 372-375**

Support: 342 -344 **, 334-335 ***

SOYBEANS (November)

Session Close: November soybeans closed 8 cents lower from Fridays close, in an 8 cent range.

Fundamentals: Harvest continues to be the key note for market participants. Yesterdays weekly update from the USDA showed that we are 49% harvested, just 1% behind the average estimate. This years harvest pace is 11% behind the five year average and is the third slowest since the year 2000. The major lagers are: South Dakota -30%, Iowa -34%, Nebraska -34%, and Minnesota -37%. The near-term forecast looks to provide a break in the weather which should offer a good opportunity for producers to get back in the fields. Speaking of weather, market participants will also want to keep an eye on South American forecasts where there have been concerns of Brazil being too dry and Argentina too wet. Also, out yesterday were the weekly export inspections, those came in at 1,770,324 metric tons, this was above the high end of the range at 1,400,000 metric tons. NOPA crush showed September bean crush at 136.4 million bushels, this was below the expectations of 138.071 million bushels but the highest September read since 2007.

Technicals: The market saw a nice premium come into the market last week on the back of a technical breakout above key resistance which came in at 977. Previous resistance from 975 -977 will now be technical support. This represents the 200-day moving average as well as the middle of the years trading range. So long as the bulls maintain price action above this pocket, they will remain in control. If the bears achieve a close below we could see long liquidation down towards 959 -962 , a three-cent pocket with a handful of technical indicators. Higher highs and higher lows have been a trend over the past two months and a close back above 993 opens the door to a break above $10 with 10.14 being the intermediate term target.

Bias: Bullish

Resistance: 993 **, 999 -1003 **, 1014****

Support: 975 -977****, 959 -962 ****, 939 **

WHEAT (December)

Session Close: Wheat closed 4 cents lower from the Sunday night open and traded in a 7 cent range.

Fundamentals: Weekly export inspections yesterday morning came in at 322,860 metric tons, this was just below the low end of the range which came in from 325,000-525,000 metric tons and compares to last weeks read of 352,000 metric tons. The weekly planting progress report was released after the close yesterday and showed that we are 60% planted. This was 2% slower than expectations and is 11% behind the five-year average. Wet weather has been the culprit, but it appears we could see a break in the forecasts over the next week. Also in yesterdays report was emergence, wheat is 37% emerged, this compares to the five-year average of 43%.

Technicals: On the technical front, there is no disputing that the bears remain in control. The 50-day moving average has been a significant indicator for us for some time and will continue to be, we have not seen the market close above this since July. Today, that moving average comes in at 444 , only a close above will give the bulls some sort of hope. If they can work higher and close above, it is possible we could see short covering ensue. As mentioned on RFD TV yesterday, we are still looking for a test to the contract lows of 422 we saw on August 29th over the intermediate term.

Bias: Bearish

Resistance:444 -449***, 462 **, 478-479****

Support: 428 **, 422 ****, 415 **

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About the author


Oliver Sloup is Vice President of Blue Line Futures, a leading futures and commodities brokerage firm located at the Chicago Board of Trade. Blue Line Futures mission is to put the customer first, and that means bringing YOU the best customer service, consistent and reliable research and state of the art technology.  Oliver has been a guest on CNBC and Bloomberg, among others.  Oliver has over a decade of trading experience. Prior to Blue Line Futures, Oliver worked as the Director of Managed Futures at iiTRADER.

 

 

Contributing author since 10/6/17 

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