Ag Markets Sensitive to Dollar Volatility

02/12/2019 11:19 am EST

Focus: COMMODITIES

Oliver Sloup

, Blue Line Futures

Oliver Sloup, vice president of Blue Line Futures, provides daily fundamental and technical outlook on grain markets.

Corn (CH)

Yesterday’s Close: March corn futures finished yesterday’s session down 0.75¢, trading in a range of 3.25¢.

Fundamentals: Weekly export inspections came in at 744,000 metric tons, below the range of estimates from 850,000-1,150,000 metric tons. The U.S. dollar posted has been on its longest winning streak in the past two years. That win streak may be coming to an end as the market is retreating off of technical resistance from December. Trade talks are set to continue this week, with headlines suggesting that the March 1 deadline could be pushed back.

Technicals: The market retreated yesterday but managed to find and hold our first support pocket from $3.71-$3.72 ½. The bulls DO NOT want to see a retest to this pocket, that would likely lead to a bigger technical breakdown. First resistance this morning comes in from $3.76 ¼-$3.76 ¾, a close above here could extend the market back towards the top end of the range (382ish).

Bias: Neutral/Bullish

Resistance: 376 ¼-376 ¾**, 382-384 ½**, 388-390 ½****

Support: 371-372 ½***, 367 ¼-368 ½****, 354 ¾****

Soybeans (SH)

Yesterday’s Close: March bean futures finished yesterday’s session down 10.75¢, trading in a range of 15.25¢.

Fundamentals: Soybeans were under pressure yesterday but have stabilized in the early morning trade as trade talks with China resume and the tariff deadline may be pushed back. Expect headlines through the remainder of the week to keep the market choppy. Yesterday’s weekly export inspections report came in at 1,060,000 metric tons, within the range of estimates from 600,000-1,200,000 metric tons.

Technicals: The market retreated towards significant support yesterday, we defined that as $8.97-$9.00 ¼. This pocket represents the January lows, the 100-day moving average, and trend line support from the September lows. That trendline has been tested and held once a month for the last five months. Resistance this morning comes inf rom 913 ¼-916 ¼.

Bias: Neutral/Bullish

Resistance: 913 ¼-916 ¼**, 931 ¼**, 941-947****

Support: 897-900 ¼****, 890 ½-891 ¼**, 880 ½**

Wheat (WH)

Yesterday’s Close: March wheat futures finished yesterday’s session up 0.25¢, trading in a range of 7¢.

Fundamentals: All in all, wheat was constructive yesterday. The market recovered to finish positive, despite the dollar staging its longest rally in two years. Wheat also overcame headwind from weakness in corn and beans. The market is softer in the early morning trade, but we will see how the floor opens before putting too much weight into the low volume trade. Weekly export inspections yesterday morning came in at 562,000 metric tons, this was towards the top end of the expected range from 400,000-600,000 metric tons.

Technials: The market hunted for stops below Thursday’s lows but came up empty handed, keeping our support pocket from $5.08-$5.10 intact. A break and close below here will neutralize our bias. On the resistance side of things, $5.22 ¼--$5.25 is the pocket that the bulls need to reclaim on a closing basis. If they can achieve this, we would expect to see a retest of the December highs near $5.40.

Bias: Neutral/Bullish

Resistance: 522 ¼-525***, 531-532**, 537 ¾-541 ¾****

Support: 508-510**, 499-501 ¼****

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