Grain Bulls Need to be Fed Positive News

11/12/2019 12:15 pm EST

Focus: COMMODITIES

Oliver Sloup

, Blue Line Futures

With the growing season over, grain bulls need positive news to move markets, writes Oliver Sloup.

Corn (ZCZ)

Fundamentals: Corn futures were softer to start the week as market participants continued to digest Friday’s delayed WASDE report. The delay provided a pop from algorithmic buying but was short lived as participants realized it wasn’t a bullish report. We are in a time of year where news is hard to come by, the bulls need to see better weekly export numbers and a weaker USD to help shift the money flow and prop up the board. Crop Progress will be out after the close, expectations are for harvest to be near 70% complete.

Technicals: Unfortunately, the bear camp has seized control of the technical landscape, only consecutive closes back above $3.77-$3.81 ½ would change that. First support comes in from $3.68 ¼, a break and close below here warrants a potential retest of contract lows at $3.52 ¼.

Bias: Bearish/Neutral

Previous Session Bias: Bearish/Neutral

Resistance: 390-392 ¾***, 400-402 ½***

Pivot: 377-381 ½

Support: 366-368 ¼***, 350-352 ¼****

Soybeans (ZSF)

Fundamentals: Soybean futures broke down below technical support on the lack of bullish news. President Trump is set to speak at the Economic Club of New York today, the topic: U.S. Trade Policy. We are expecting to see headlines from this, influence prices. Looking at past references, it is more likely to be a positive spin than a negative one. This afternoons Crop Progress report is expected to show harvest at 90-95% complete.

Technicals: The market broke below technical support yesterday which has help aid a bearish head and shoulders pattern, leaving the door open for further declines. First technical support today comes in from $9.09 ½-$9.12 ¾. We feel that this is a buying opportunity on the first test, but a break and close below flips our bias to bearish. The next significant support pocket doesn’t come in until $8.95 ¾.

Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

Resistance: 919 ½-922***, 940-941 ½***

Support: 909 ½-913****, 894-895 ¾**

Chicago Wheat (ZWZ)

Fundamentals: Chicago wheat futures slid lower yesterday on the back of weakness in corn and beans. The Kansas City contract has been narrowing the gap, we continue to believe that spread will narrow over time.

Technicals: Chicago wheat futures are threatening a retest of technical support, we have defined that as $5.00 ¾. This is a must hold pocket for the bull camp, a failure and break below opens the door for a decline towards $4.89 ¼. On the resistance side of things, the bulls need to see consecutive closes back above $5.15 ¼.

Bias: Bearish/Neutral

Previous Session Bias: Bearish/Neutral

Resistance: 515 ¼-517 ¼**, 535-538 ½****

Support: 496 ¼-500 ¾****, 485 ½-489 ¼***

Kansas City Wheat (December)

Technicals: Kansas City wheat futures have been putting in some work to help narrow the spread with the Chicago contract and we believe there is more to go. The bulls have the advantage here so long as they can continue to defend technical support from $4.11 ½ to $4.15 ½. This pocket represents trendline support, a key retracement, and the 50-day moving average. The market is testing the 100-day moving average this morning at $4.27 ½, but the more meaningful resistance comes in at $4.32 ¼ and then at $4.37 ¼. This pocket represents the highs from last week, a key retracement, and the highs from Oct. 21.

Bias: Bullish/Neutral

Previous Session Bias: Bullish/Neutral

Resistance: 432 ¼-437 ¼***, 454-457 ¾****

Support: 411 ½-415 ½****, 397-400***, 380*

Cotton (December)

Technicals: The market has been consolidating recently, trading in between our support and resistance pockets, keeping them intact. We remain optimistic on prices but need to see the bulls defend support from 62.91-63.39 to remain in control. A break and close below would neutralize our near-term bias. On the resistance side of things, the bulls need a conviction close above resistance from 65.85-66.05 to encourage another leg higher.

Bias: Neutral/Bullish

Previous Session Bias: Neutral/Bullish

Resistance: 65.85-66.05****, 68.35-68.60***

Support: 62.91-63.39****, 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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