Grains Rally Following Bullish USDA Report

Grain Express Research Posts

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Corn, soybeans, and wheat futures all surged higher following yesterday’s Bullish USDA report. Will the rally continue or will it fizzle out like it did last Friday?

Corn

News

  • The USDA pegged corn production at 15.064 billion bushels – down 70 million bushels from last month, as a result of a decrease in yields. Before the report, traders’ average estimate for yields was reported at 173.5 bushels per acre (BPA). As such, when USDA reported yields at just 173.0, it came as the first bullish surprise for corn in quite a while. Prices responded accordingly.
  • Weekly Export Sales: Net sales of 910,400 MT for 2023/2024 were down 50 percent from the previous week and 9 percent from the prior 4-week average.

Technicals (December)

Corn futures had an identical trading day to last Thursday, trading within a quarter cent of the high and low from October 5th.  Last week the market failed to find any follow-through, will this week be different?  The Bulls need to see a close out above 502-506 1/2 to spark another leg higher.  A failure to do so could set the market back in to our pivot pocket from 489-491.

Bias: Bullish/Neutral

Resistance:  502-506 1/2***, 511 1/4**

Pivot: 489-491

Support: 472-476***, 460-464 1/2**

Seasonal Tendencies

Below is a look at historical seasonalities (updated each Monday) VS today’s prices (black line). 

*Past performance is not necessarily indicative of futures results.

Soybeans

News

  • November soybeans were the big winner yesterday – settling 37 ½ cents higher to close at 1290. Like corn, soybean production estimates were lowered 42 million bushels from last month to 4.1 billion bushels as a function of lower yields. Soybean yields came in at 49.6 BPA which compares to USDA’s 50.1 BPA estimate from last month, and pre-report expectations of 49.9 BPA.
  • Weekly Export Sales: Net sales of 1,056,800 MT for 2023/2024 were up 31 percent from the previous week and 68 percent from the prior 4-week average. 

Technicals (November)

November soybean futures got shot out of a cannon following yesterday’s USDA report.  The move out above 1280-1285 sparked additional momentum towards our next resistance pocket 1300-1308 1/2, which remains intact for today’s trade.  If the market can chew through this pocket, it could open the door for a run at a cluster of moving averages near 1320, which includes the 50 and 200 day moving averages. 1280-1285 will now act as support. 

Bias: Bullish/Neutral

Resistance:  1300-1308 1/2***, 1322-1328****

Pivot: 1280-1285 

Support: 1247-1257***, 1195-1200**

Seasonal Tendencies

Below is a look at seasonal averages VS this year’s price (black line) for November soybeans (updated each Monday).  

*Past performance is not necessarily indicative of futures results.

Wheat

News

  • Even though the domestic figures for wheat were not as bullish as corn or soybeans, it tagged right along with some spillover momentum and short covering.
  • Weekly Export Sales: Net sales of 652,000 metric tons (MT) for 2023/2024–a marketing-year high–were up noticeably from the previous week and up 67 percent from the prior 4-week average. 

Technicals (December)

December Chicago wheat futures got the close above 570 which has sparked a move towards our next resistance pocket, 585-587.  If the Bulls can clear this hurdle, it could be a greenlight for the Bull camp.  With that said, these overnight rallies have been short lived, so you may want to temper the expectations, after all, it is wheat.  

Bias: Neutral/Bullish

Resistance: 585-587**, 595-599 1/2***, 612-616****

Pivot: 570 

Support: 540-541 1/2**

Seasonal Tendencies

Below is a look at seasonal averages VS this year’s price (black line) for December wheat (updated each Monday). 

*Past performance is not necessarily indicative of futures results.

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Futures trading involves a 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 your identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

Performance Disclaimer

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points that can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program that cannot be fully accounted for in the preparation of hypothetical performance results all of which can adversely affect actual trading results.

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Seasonal Disclaimer

This message and its content is intended only for the person or entity to which it is addressed and should not be shared with additional parties. Seasonal tendencies are a composite of some of the most consistent commodity futures seasonals that have occurred in the past several years. There are usually underlying, fundamental circumstances that occur annually that tend to cause the futures markets to react in similar directional manner during a certain calendar year even if a seasonal tendency occurs in the futures, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past, or will in the futures, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future.

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