Corn & Wheat Rally, Beans Struggle

09/17/2019 12:00 pm EST

Focus: COMMODITIES

Oliver Sloup

, Blue Line Futures

A break down of recent price action in the grain sector from Oliver Sloup.

Corn (ZCZ)

Fundamentals: Corn futures sprang higher yesterday on the back of a few headlines revolving around the energy sector. The first headline was the attack on Saudi Arabia’s oil production facility, spiking oil prices which trickles down into strength in ethanol and corn. The wheels are also in motion for the Administration to increase the required bio-fuel blends for refineries. That news is now behind us and crude and corn are both coming off the highs in the early morning trade. Yesterday’s Crop Progress report showed good/excellent ratings at 55%, unchanged from last week and 1% above expectations.

Technicals: Yesterday’s move higher took prices within a stone’s throw of resistance, which remains intact.

Soybeans (ZSX)

Fundamentals: November soybean futures are continuing to retreat in the early morning trade on the back of broad-based weakness in agricultural markets overnight. U.S. and Chinese trade officials are set to meet in Washington D.C. this Thursday. We expect to see headlines and a positive spin on this. The National Oilseed Processors Association’s (NOPA) crush report came in at 168.085 million bushels, 6 million bushels more than expected. Yesterday’s crop progress report showed good/excellent ratings at 54%, down 1% from last week and in line with expectations. A case of Asian Swine Fever was reported in South Korea. This has been a growing concern not only for the pork market, but also soybean (meal) demand.

Technicals: The market is working back into support this morning.

Chicago Wheat (ZWZ)

Fundamentals: Chicago wheat futures managed to rally alongside the strength in the corn market but is giving up ground this morning on weakness in the broader grain sector. Money flow and price action in ags will continue to be a big driver in price action for the remainder of the week.

Technicals: The market tested and failed against the 50-day moving average for the second straight session, encouraging a light round of profit taking in the overnight/early morning trade. If the bulls can chew through.

Kansas City Wheat (December)

Bias: Bullish

Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com.

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