Grain markets appear strong as the sales to China appear to be beginning, reports Oliver Sloup.

Corn (ZCZ)

Fundamentals: December corn futures managed to stage a rather constructive session, despite prices being little changed at the close. Export sales this morning came in at 491,500 metric tons, up 15% from the four-week average. Yesterday’s weekly ethanol report showed production rose 25,000 barrels per day. There’s not a lot of flashy headlines expected as we look to round out the week, attention continues to be on harvest reports, money flow and technicals.

Technicals: The market worked lower in yesterday’s early morning trade but managed to grind higher throughout the day, when we saw more participation on the floor open. That is a positive technical development, but the bulls still have some work to do before getting to excited about a four-cent reversal. Our pivot pocket remains intact from 390-392 ¾, the bulls need to see a conviction close above here to encourage additional short covering from the funds. A failure to do so could take us back to our 4-star support pocket from $3.77 to $3.81, a must hold area.

Bias: Bullish/Neutral

Previous Session Bias: Bullish/Neutral

Resistance: 400-402 ½***, 412 ¾-417 ¼****

Pivot: 390-392 ¾

Support: 377-381 ½ ****, 363-366***

Soybeans (ZSX)

Fundamentals: The U.S. Department of Agriculture announced a sale of 128,000 metric tons of soybeans to “unknown”, this is likely China. This morning’s export sales report came in at 475,200 metric tons for the 2019/20 growing season, down 72% from the four-week average. Market participants don’t have much on the calendar as we round out the week, in terms of scheduled releases. They will be keeping their ear to the ground for harvest reports and trade talks, both of which are very fluid.

Technicals: The market has been presenting some great opportunities for both sides, trading in wide ranges put mostly staying between $9.30 and $9.35 for the last week and a half. This choppy, sideways trade keeps our technical support and resistance pockets intact; $9.48-$9.50 is the significant pocket on our radar, this represents the June highs. If the bulls can achieve consecutive closes above this pocket, we could see an extension towards $9.69 ¼, the top end of the range from February. The bull camp remains in control until we start seeing consecutive closes below support near 920.
Bias: Bullish/Neutral

Previous Session Bias: Bullish/Neutral

Resistance: 948-950****, 963 ¼-969 ¼***

Pivot: 936 ½-938 ¾

Support: 915 ¼-920***, 899-906 ¾ ****

Chicago Wheat (December)

Fundamentals: December Chicago wheat futures started yesterday’s session lower but managed to claw back into positive territory with help from corn and beans coming off of their lows. Export sales this morning came in at 262,400 metric tons for 2019/20, down 31% from the four-week average. With little new news scheduled we will continue to watch money flow and technicals, not just for wheat but the other grains too, as it will likely have some sort of spillover effect.

Technicals: First support was tested and held yesterday; we had defined that as $5.15 ¼. In yesterday’s report we wrote: “If you reduced against resistance and are still bullish, this is the spot to consider putting that exposure back on.”. The bulls need to see prices back above our pivot pocket from 525 ¾-531 ½ to encourage another leg higher.

Bias: Neutral

Previous Session Bias: Neutral

Resistance: 538 ¼-543***, 561-565 ¾****

Pivot: 525 ¾-531 ½

Support:515 ¼**, 500-506 ¼****

Kansas City Wheat (December)

Technicals: Kansas City wheat futures worked into our first support pocket from $.4.15 ½-$4.20 and managed to hold. The bull camp needs to defend this pocket through the remainder of the session, a failure to do so could take us back to the technically and psychologically significant $4.00 handle. On the resistance side of things, $4.39 ½ remain intact.

Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

Resistance: 437-439 ½***, 454-457 ¾****

Pivot: 428-432 ¾

Support: 415 ½-420**, 397-400***, 380*

Cotton (December)

Fundamentals: Cotton futures have stabilized through the first half of the week as participants remain optimistic on future supply and demand fundamentals. Export sales this morning came in at 140,500 RB for 2019/20, this was down 32% from last week and down 23% from the four-week average.

Technicals: Consolidation over the past few sessions have kept most of our support and resistance pockets unchanged. First resistance comes in from 65.00-565.85, if the bulls can achieve consecutive closes above here, we could see an extension towards 68.35-68.60. On the support side of things, a pullback to 61.72-62.50 may present another buying opportunity.

Bias: Bullish/Neutral

Previous Session Bias: Bullish/Neutral

Resistance: 65.00-65.85****, 68.35-68.60***

Support: 61.72-62.50****, 59.58-60.79***, 56.59-57.55****

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

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