Grain Express – Blue Line Futures


Corn (December)

Fundamentals: Corn futures dipped lower yesterday but managed to defend support and close off the lows, helping propel prices higher in the early morning trade. Also helping the overnight/early morning trade is the incredible strength we continue to see in the soybean market, with January futures coming within a nickel of the psychologically significant $12.00 handle. Yesterday’s weekly export sales report showed net sales of 1,088,600 MT for 2020/2021 were up 11 percent from the previous week, but down 43 percent from the prior 4-week average.

There were flash sales this morning:

Private exporters reported to the U.S. Department of Agriculture the following activity:

  • Export sales of 158,270 metric tons of corn for delivery to Mexico during the 2020/2021 marketing year; and
  • Export sales of 131,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.

Technicals: The late Wednesday and early Thursday trade looked encouraging for sellers, but yesterday is close off the lows muted some of that excitement for us. Futures are back near the highs in the early morning trade, if the Bulls can get out above resistance with conviction, we will be neutralizing our bias into the weekend and see what next week brings.

Bias: Bearish/Neutral

Previous Session Bias: Bearish/Neutral

Resistance: 422 ¼-428**

Pivot: 416 ½-417 ½

Support: 409-411 ¼***, 400-403 ¾***

Soybeans (January)

Fundamentals: Soybean futures are working to post another higher close today, this would make it 13 out of the last 14 sessions. The “reversion to the mean” traders are continuing to swim upstream, as fundamentals, technicals, and money flow continue to encourage buying. Argentina is estimated to be 29% complete, 2% behind last years pace. Their crop is rated at 95% good, well above the 64% rating we saw last year. Yesterday’s weekly export sales report showed net sales of 1,387,700 MT for 2020/2021–a marketing-year low–were down 6 percent from the previous week and 18 percent from the prior 4-week average.

Technicals: Soybeans are on a mission, with what appears to be a one-way ticket higher. January futures are at new contract highs this morning and are approaching the psychologically significant $12.00 handle, with the 2016 (June 10th) spike high just above that, 1208 ½. In many other commodities like gold, oil, etc, the continuous chart holds more credibility, but the conditions for price changes in the grain markets are drastically different. So, we take the continuous chart with a grain of salt, especially when going back 4-years.

Resistance:1208 ½**

Support: 1162 ¼***, 1140-1145**

Chicago Wheat (December)

Technicals: All things considered; wheat futures feel heavy. Though in positive territory this morning, it is trading like it’s riding the coat tails of corn and beans, not trading higher on it’s own merits. The market ran stops below first support yesterday but managed to defend it into the close, 592 ½. A close below here confirms our bearish bias. If you sold $6.00 this week, you may consider tightening things up ahead of the weekend. $6.00 may be a magnet today with options expiration. A conviction close above our pivot pocket would have us neutralizing our bias.

Bias: Bearish

Previous Session Bias: Bearish

Resistance: 626 ¼**, 636 ¾-640**

Pivot: 599-603 ½

Support: 592 ½**, 578 ¼-584 ¼***, 555-561 ¼****

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