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Grain Express: June 30, 2020

By:

Vice President of Blue Line Futures

Corn (September)

Fundamentals: Corn futures rallied hard yesterday, erasing losses from the back half of last week’s trade, that momentum has carried over into the early morning trade. This momentum comes on the back of short covering ahead of today’s USDA report, out at 11:00am CT. Keep in mind that it is also the end of the month and quarter, which could be encouraging additional position squaring. You can find the estimates at the bottom of this report. Export inspections yesterday morning came in at 1.2mmt, this was at the top end of trade estimates. There were also rumors that China was in the market for US corn, this could just be analysts looking for an after the fact reason for the pop. Yesterday’s Crop Progress report showed good/excellent conditions at 73%, 1% higher than last week and inline with expectations.

Technicals: September corn futures have clawed back some of the recent losses, taking us back to the breakdown point and our resistance pocket near 330 ½. If the Bulls can achieve a close above this pocket today, we could see additional short covering propel the market back towards the recent highs, something that seemed nearly out of the question just a few days ago. A failure at this pocket keeps the bears in control. Our bias remains Neutral ahead of today’s report.

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Bias: Neutral

Previous Session Bias: Neutral

Resistance: 338 ¼-339***

Pivot: 328-330 ½

Support: 314 ¼-317 ½****

Soybeans (November)

Fundamentals: November soybean futures made new lows for the move yesterday but managed to finish the day near unchanged. The market is moving higher in the early morning trade as some traders see value at these prices into today’s USDA report. You can find the estimates at the bottom of this report. Export inspections yesterday morning came in at 325 tmt, nothing to write home about. Yesterday’s Crop Progress report showed good/excellent conditions at 71%, 1% higher than last week.

Techncials: Soybean futures broke below the low end of the most recent range last week, accelerating the selling pressure down to our 4-star pivot pocket which we defined as 855-860 in yesterday’s report. As mentioned in the Tech Talk video over the weekend, we believe this area represents value from a risk/reward perspective, but the Bulls must defend it on a closing basis. A failure to defend this area could open the door for another leg lower, 838-840 being the next meaningful support pocket.

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Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

Resistance: 877 ½-882 ¼***, 902***

Pivot: 855-860****

Support: 836 ¾-840 ¾****, 830-831**

Chicago Wheat (September)

Fundamentals: Chicago wheat futures snapped back yesterday, erasing much of Friday’s loss. Export inspections came in at 515tmt, within the range of expectations. Crop Progress showed winter wheat harvest is 41% complete and the crop has a good/excellent rating of 52%. Good/excellent conditions for spring wheat came in at 69%, a 6% drop from last week. Today’s USDA report will be out at 11:00am CT.

Technicals: The wheat chart has been controlled by the bears for the better part of the last 3-months, and there is nothing over the last week that has changed that. Our bias remains Neutral as we see the risk of a relief rally offsetting potential downward movement. Previous support became minor resistance at 481, this will act as a pivot pocket going forward. The more significant resistance pocket will come in from 497-502 ¼. Consecutive closes above this pocket would neutralize the technical landscape.

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Bias: Neutral

Previous Session Bias: Neutral

Resistance: 497-502 ¼****

Pivot: 481Support: 471-475***

The support and resistance levels are created through our systematic and proprietary technical analysis and ranked by significance from 1 to 4 stars (****). 1-2 star levels are typically best focused on intraday or early in a session to help confirm momentum. 3-4 star levels are used to define a floor or ceiling in a market, a move and close above or below could signal a breakout or breakdown.

Our bias is our outlook for the underlying market, with 7 separate rankings from outright bullish to outright bearish.

Bullish – Outright bullish

Bullish/Neutral – Bullish the market but there may be technical/fundamental headwinds around the corner

Neutral/Bullish – relatively neutral market with prices testing technical support

Neutral

Neutral/Bearish – relatively neutral market with prices testing technical resistance

Bearish/Neutral- Bearish the market but there may be technical/fundamental headwinds around the corner

Bearish – Outright bearish

Disclosure: Blue Line Futures

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.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Blue Line Futures and is being posted with permission from Blue Line Futures. The views expressed in this material are solely those of the author and/or Blue Line Futures and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.

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