Did grains miss their chance to rally?

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A video breakdown of the grain and livestock markets


Corn (December)


Yesterdays Close:December corn futures finished yesterdays session up 1 cent, trading in a range of 13 cents on the day. Funds were estimated buyers of 9,000 contracts.


Fundamentals: Yesterdays USDA report had a little something for everyone. The yield number came in at 178.9 bushels per acre, putting U.S. carryout at 1.736 billion bushels, both lower than expectations. China made revisions to their corn number going back 10 years which put sent world ending stocks to 307.5mmt, up 148.16 from the previous month. Export sales yesterday morning came in at 701,500 metric tons for 2018/2019, within the range of expectations. The bearish seasonal trade started yesterday; If you had sold December corn on November 8th and bought back on November 19th, you would have been profitable for 13 of the last 15 years, the average profit on that has been 11 cents.


Technicals:


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Soybeans (January)


Yesterdays Close:January soybeans finished yesterdays session down of a cent, trading in a 20-cent range. Funds were estimated sellers of 4,000 contracts on the day.


Fundamentals: Yesterdays USDA report showed U.S. soybean yields at 52.1 bushels per acre, down 1 bpa from the previous month. Soybean ending stocks came in at 955 million bushels, considerably higher than what majority of analysts were looking for. Export sales yesterday morning came in at 388,400 metric tons for 2018 and 3,000 for 2019/2020, another pathetic number. Psychology is an important aspect in trading, if not the most important. We continue to caution the bears here despite the fundamentals being overwhelmingly bearish. The sentiment is overwhelmingly bearish, when everyone is thinking the same thing its time to think outside the box. That coupled with the idea that funds look more interested in covering than adding to shorts has us more interested in the buy side (at slightly lower prices, see full technical breakdown below).


Technicals:


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Wheat (December)


Yesterdays Close:December wheat futures finished yesterdays session 2 cents lower, trading in a range of 13 cents. Funds were estimated sellers of 2,000 contracts on the day.


Fundamentals: Wheat ending stocks dropped to 949 million bushels which was a silver lining for the wheat market. The headwinds this morning are coming on the back of a surging U.S. dollar following yesterdays Federal Reserve meeting. The bearish seasonal trade that started yesterday is off to a good start, If you had sold on November 8th and bought back on December 11th, you would have been profitable for 13 of the last 15 years, the average gain has been about 13 cents. We think there will be an opportunity to buy the market in the near future, but the fundamental and technical headwinds have us on the sideline this morning.


Technicals:


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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.