The grain markets are focusing on technicals heading to the holiday week, reports Oliver Sloup.

Corn (ZCH)

Fundamentals: With little new news on the wire, March corn futures spent much of last week trading sideways. We are anticipating this week to be relatively quiet with Thanksgiving on Thursday. Exports improved last week; we will want to see that continue in this Friday’s report. The weekly Commitment of Traders (COT) report showed funds sold another 12,610 contracts, expanding their net short position to 123,530.

Technicals: Corn set $3.75 as the line in the sand that the bulls must defend on a closing basis; this acted as support in August, before breaking to contract lows. It then acted as support again in September, after rallying off contract lows. A break and close below takes us back to the lows, $3.65 ¾. On the resistance side of things, the bulls have their work cut out for them. Consecutive closes back above $3.82 ¾ could spark short covering and take us back above $3.90.

Bias: Neutral
Previous Session Bias: Neutral/Bullish
Resistance: 381 ¼-382 ¾***, 389 ¾-392 ¼****
Support: 375-376 ¾***, 365-365 ¾****

Soybeans (ZSF)

Fundamentals: January soybeans had a technical breakdown last week after reports of the “Phase One” trade deal being delayed; this shouldn’t come as a big shock. The market seemed to see price in a regression, which could mean we see increased tariffs on Dec. 15. With Thanksgiving on Thursday, weekly export sales will be released Friday. Last week’s COT report showed funds sold 12,598 contracts, trimming their net long position to just 18,452 contracts.

Technicals: The technical breakdown in soybeans has taken prices back below the psychologically significant $9.00 handle, but the significant technical level come in from $8.94-$8.95 ¾. This pocket represents the 50% retracement from the contract lows to the recent highs, it also represents other previously important price points. If the bulls cannot defend support, we could see the selling accelerate and take prices back into the mid-$8.70s.

Bias: Neutral
Previous Session Bias: Neutral
Resistance: 909 ½-913***, 928 ½-930 ¼**, 940-941 ½***
Support: 894-895 ¾**, 879-882**, 865-869 ½****

Chicago Wheat (ZWH)

Fundamentals: With December options off the board, we are focusing in on the March contract which is catching a bid in the early morning trade. Friday’s COT report showed that funds sold 2,441 contracts, putting them net short 2,049. This is a neutral position, especially when compared to KC wheat where funds are short over 26,000 contracts.

Technicals: Wheat futures are rallying in the early morning trade on relatively light volume. First resistance this week comes in from $5.25 ¾ to $5.29 ¼. This pocket represents highs from earlier in the month and a key retracement. A close out above here will likely take us above $5.38 ¼, which would be the highest price since July.

Bias: Neutral
Previous Session Bias: Neutral
Resistance: 525 ¾-529 ¼***, 538 ¼-540****
Pivot: 515 ¼-517 ¼
Support: 496 ¼-500 ¾****, 485 ½-489 ¼***

Kansas City Wheat (March)

Technicals: Kansas City wheat futures are rallying but are lagging the Chicago contract, widening the already extremely wide spread. We still feel more comfortable being long on the KC side than being long Chicago in the above $5.25. First resistance comes in from $4.45 ½ to $4.49 ½. This pocket represents the highs over the last two-months. A close above here could spark a round of short covering and take us towards the 200-day moving average at $4.65 ¼.

Bias: Bullish/Neutral
Previous Session Bias: Bullish/Neutral
Resistance: 445 ½-449 ½***, 465 ¼****
Pivot: 436 ¼
Support: 427 ½-429 ½***, 422 ¾-423**, 411 ¾-413****

Cotton (March)

Technicals: Cotton futures have reclaimed ground above the 65.00 handle but need to see that hold for consecutive sessions. If the bulls can achieve this, we could see an extension towards 66.93-67.13. A failure to hold ground above 65.00 keeps the bears in the driver’s seat and could take us back towards our support pocket from 62.81-63.73.

Bias: Neutral/Bearish
Previous Session Bias: Neutral/Bearish
Resistance: 64.52-65.00***, 66.80-67.13***, 69.07-69.20****
Support: 62.81-63.73***, 60.30-60.56***

Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com. Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and actionable bias and levels.

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