Grain and Livestock Market Recap

Research Posts Grain Express

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Grain futures were under heavy pressure early on but were able to stabilize into the afternoon. Cattle futures continued lower, erasing the gains from the back half of last week’s trade.

Grains

December corn futures made new lows early this morning, trading to its lowest level since September of 2021 as funds continue to grow their net short position to the largest since August of 2020, about 135k contracts.   Despite the weakness early on, futures were able to snap a 3-day losing streak with the December contract settling 4 ¾ cents higher to 476 ¼.  How much more downside is left is the question we get repeatedly.  With where things are right now, we see a scenario where we settle into a range bound trade 15-cents on either side of 470.  With harvest only 9% complete, potentially updated yields from the fields would be a catalyst to get the market moving in wider ranges.  As it stands, volatility is still near its lowest levels since Spring, this does make options more appealing for traders and hedgers alike, whether it be to manage risk or take an outright position. 

Soybeans broke below the 200-day moving average yesterday which opened the floodgates for continued selling pressure overnight, taking prices within pennies of our next downside support pocket, 1300-1304.  At the close November soybeans were 1 ¼ cent lower, settling at 1315 ¼.  The fact that the Bulls were able to defend this pocket sparked some intraday consolidation, but the Bulls need to get back out above 1330 to negate yesterday’s breakdown.  A retest and failure at $13.00 could lead to a retest of the August 8th low and 50% retracement, which both come in from 1280-1282.  If the market were to break to this pocket we would likely view it as a buying opportunity on the first test.  Historically we’ve seen seasonality suggest weaker into the first week so we are hesitant to get too bulled up at this point. 

Wheat continues to be like the Nebraska Corn Huskers and/or the Chicago Bears, disappointing, but disappointing to the extent that you’re almost numb to it.  At the close December wheat futures finished the day 7 ¼ cents lower settling at 584.  Low stocks to use numbers coupled with seasonal tendencies seem like friendly catalysts, but that hasn’t stopped the funds from selling into any relief rally.  A close above 610-615 is the level we want to see the market get back out above, that could be the trigger to start a bigger wave of short covering. 

Livestock

December live cattle made new highs in the early morning trade but reversed to finish the session 52 cents lower to 190.47.  The past two sessions have only done enough damage to erase Friday’s gains. 

October feeder cattle futures finished the day 1.60 lower.  The last two sessions have basically erased all of last Thursday and Friday’s gains.  If the selling persists, the 50-day moving average would be a potential support level to keep an eye on, that comes in at 253.71.

On the snout side, December lean hogs were the big winner, settling 1.82 higher to 76.25.  All in all, though, this market is largely directionless in-between 71(ish) and 77(ish).


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Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. 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.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

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