Grain Futures Grind Lower Overnight

Grain Express Research Posts

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Grain futures were under pressure in the overnight and early morning trade as the buyers strike continues amidst a lack of new news to spark a short covering rally

Corn

Technicals (March)

Corn futures were able to squeak out their second consecutive day of gains in yesterday’s trade.  The conviction behind the two-day bounce is minimal on its own, but it’s diminished even more so when considering the selloff that has occurred in the two weeks prior.  The corn chart doesn’t look pretty, now doubt about it, but the velocity of the selling has slowed (for now), which is something to note. 

Bias: Neutral/Bullish

Resistance: 440-441**, 450-453 1/4****

Pivot: 435-436 1/2  

Support: 425**

Fundamental Notes

  • Crop Consultant Dr. Michael Cordonnier lowered his Brazilian corn production estimate to 112 MMT, down 3 MMT from his previous estimate.  He sees the Argentine corn crop at 54 MMT, down 2 MMT from the previous estimate. 
  • The 100th USDA Outlook Forum starts on Thursday.  Data will include seeding estimates, ending stocks and more.  Many analysts see corn seedings coming in from 91-92 million acres.

Seasonal Tendencies

(updated on Mondays)

Below is a look at historical seasonal averages for March corn futures (updated each Monday) VS today’s prices (black line). 

*Past performance is not necessarily indicative of futures results.

Fund Positioning

(updated on Mondays)

Funds were net sellers of corn for the sixth consecutive week, expanding their net short position to 297,744 futures and options contracts.  This is the largest net short position since the spring of 2019, when they accumulated a net short position to the tune of 322,215 contracts. 

Soybeans

Technicals (March)

Soybean futures are making new lows for the move in the overnight session, gravitating towards first support from 1175-1176.  A break and close below this pocket keeps the door open for a retest of the May/June lows from 1145-1157.  If the market were to retreat to this pocket we would see it as a potential buying opportunity on the first test, whether that be buying to cover shorts or buying to initiate a new long position.  This would be a counter trend trade, so risk management is paramount.  Options may be a tool to consider using to help manage that risk. 

Bias: Neutral

Resistance:  1221-1223**, 1230-1235*** 1250-1260****

Pivot: 1198-1205 1/2

Support: 1175-1176**, 1145-1157****

Fundamental Notes

  • Michael Cordonnier lowered his Brazilian soybean crop estimate to 147 MMT, down 2 MMT from his previous estimate and well below the USDA’s estimate of 156.  He now sees the Argentine crop at 50 MMT, down 2 MMT from the previous estimate. 
  • The 100th USDA Outlook Forum starts on Thursday.  Data will include seeding estimates, ending stocks and more.  Many analysts see soybean seedings coming in from 85-87 million acres.

Seasonal Tendencies

Below is a look at historical seasonal averages for March soybean futures VS this year’s price (black line), updated each Monday.  

*Past performance is not necessarily indicative of futures results.

Commitment of Traders Snapshot

(updated on Mondays)

Funds were net sellers of soybeans for the 12th consecutive week, growing their net short position to 130,300 futures/options contracts.  Broken down that is 174,668 shorts versus 44,368 longs.  This is the largest net short position since 2019 when the amassed a record net short position of 168,835 contracts. 

Wheat

Technicals (March)

March wheat futures are threating a break below the bottom side of the wedge with significant support coming in from 573-578.  A failure to defend this pocket on a closing basis keeps the door open for a retest of the November lows near 555-558.  

Bias: Neutral

Resistance:  608 1/2-611**, 618-622**** 

Pivot: 595 3/4-600 

Support:  573-578***, 555-558****

Fundamental Notes

  • The USDA outlook forum starts tomorrow and goes through Friday.  Analysts expect to see wheat acres drop 2.1 million to 47.5 million.  
  • The US Dollar surged higher yesterday on the back of a hotter than expected inflation data.  This continues to be a headwind for the wheat market. 

Seasonal Tendencies

Below is a look at historical seasonal averages for March Chicago wheat futures VS this year’s price (black line), updated each Monday. 

*Past performance is not necessarily indicative of futures results.

Commitment of Traders Snapshot

(updated on Mondays)

Friday’s Commitment of Traders report showed little change in the Managed Money net position.  Funds are seen to be net short about 67k futures/options contracts.

Oliver Sloup, VP & Co-Founder, Blue Line Futures

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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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