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The Grain Express

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10.18.17 Closing Grain commentary

CORN (December)

Session Close: December corn futures closed 1 cent lower yesterday with futures trading in a whopping 2 cent range on the session. Funds were estimated to have been sellers of 5,000 contracts.

Fundamentals: The market is having a hard time finding significant new news to get this market going in a direction other than sideways. Yesterdays weekly EIA report showed ethanol production rose to 1.019 million barrels per day, this compares with the 967,000 we saw in the previous week and the 998,000 we saw last year. Corn usage came in at 104.8 million bushels, this was up from 99.4 million bushels last week and slightly up from the 102.6 million bushels we saw for the same time last year. Export sales this morning came in at 1,254,900 metric tons, this compares with the estimated range from .8-1.1 million metric tons; last weeks read was 1,593,152 metric tons. Harvest activity will continue to be monitored here in the states as we inch towards the half-way point. Friendlier forecast over the next week should help producers close the gap with the five-year average pace in which they continue to lag.

Technicals: The volatility has been non-existent in the corn market for the last month + and it may continue over the intermediate term. Many market participants are looking for a fundamental catalyst to provide a breakout or a breakdown, both of which are relatively close to the market. First resistance this morning comes in at 355, this represents the 50-day moving average, something that the bulls have not seen a close above since the end of July. If they can achieve a close above in the near term, we could see funds buy to cover or what is often referred to as a short covering rally. On the support side, contract lows of 342 is the line in the sand. A close below could lead to a slow bleed down to 335.

Bias: Neutral

Resistance: 355-356 **, 360-362***, 372-375**

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

SOYBEANS (November)

Session Close: November soybeans closed lower by 2 cents during yesterdays session in a range of 6 cents. Funds were estimated to have been flat on the session.

Fundamentals: Soybean futures continued to soften yesterday as harvest continues to roll onward here in the states. A break in the wet weather should offer producers the opportunity to continue harvest, and this has helped push some buyers back to the sidelines. Outside of the weather here in the states, market participants will want to keep a close eye on developments in South America as they continue to plant. Better forecasts in Brazil seem favorable at the moment, if that changes we could see a small premium creep back into the market. Export sales this morning came in at 1,275,200 metric tons, this compares with the estimate range from 1.3-1.7 million metric tons; last weeks read was 1,747,274 metric tons.

Technicals: The market started out on a stronger note yesterday morning but failed to keep that momentum into the afternoon session. The inability to maintain gains has put some bulls back on the sideline for the very near term. First technical support this morning comes in from 975 -977, this has been a significant pocket for us for the past month (previously significant resistance). This represents the 200-day moving average and 50% retracement on the year. If the bears can pile on and achieve a close below, the next support pocket come in from 959 -964, this represents the 50-day moving average, the 100-day moving average, trendline support from the August lows, as well as a key Fibonacci retracement level.

Bias: Bullish

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

Support: 975 -977****, 959 -964****, 939 **

WHAT (December)

Session Close: December wheat futures closed 5 cents lower in yesterdays trade, trading in a range of 6 cents. Funds were estimated sellers of 3,000 contracts on the session.

Fundamentals: The wheat market continued to trade lower yesterday as the bearish fundamentals continue to weigh on prices. Ample global supplies continue to be the culprit, along with Russia, the UK, and the EU expected to produce at a high level. On top of ample supplies, exports have been on the lighter side too. Export sales this morning came in at 615,400 metric tons, this versus the estimated range from 250,000-450,000 metric tons; this compares with the dismal 174,961 metric tons we saw last week. Mexico was the top buyer, followed by China. Although this was above expectations, the market will want to see this become a trend; one week will not keep the bears at bay.

Technicals: We dont mean to be a broken record, but there is not much to say other than the bears are controlling the market with conviction. The market found some support yesterday at 429, a cent above our first support level. We continue to believe contract lows are in the cards over the next week. Key technical resistance comes in at 442 , this represents the 50-day moving average, something we have not closed above since July. If the bulls can achieve a close above this indicator in the near future we could see a short covering rally; until then the bears get the nod.

Bias: Bearish

Resistance:442 -445 ***, 462 **, 478-479****

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

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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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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.



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