Grain Market Levels

12/02/2019 3:00 pm EST

Focus: COMMODITIES

Oliver Sloup

, Blue Line Futures

An update of support and resistance in the grain complex from Oliver Sloup.

Corn (ZCH)

Fundamentals: March corn futures caught a bid on Friday, but the volume was nearly half of what it was earlier in the week. We often say that volume confirms price, so take Friday’s action with a grain of salt, the price action with little participation can be similar to that of a smoke and mirrors show. With little new news expected from the states, attention will turn to South America, technicals, and money flow. Argentina is said to be nearly 50% planted and weather forecasts for Brazil look to be friendly for their crop.

Technicals: The market traded higher into the weekend, on light volume. With prices against our technical resistance pocket, the bull-camp needs to see follow through momentum with more participation to start the week. That pocket comes in from $3.81 ¼-$3.82, this was previously support. Consecutive closes above here could spark some short covering from the funds and take us back into the 390’s.

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

Soybeans (ZSF)

Fundamentals: January soybean futures finished last week’s trade at the lowest price since Sept.10. The seven consecutive days of lower closes is the longest streak since the end of April and beginning of May. With harvest essentially complete, attention will turn back towards trade with China and the South American crop. Both of these fundamental catalysts will likely come with a bundle of uncertainty which could provide trading opportunities for both sides of the market. December 15th is the date that tariffs are set to be increased, we wouldn’t be surprised to see this get kicked down the road.
Technicals: The market worked into our technical support pocket on Friday and managed to close below the low end, typically an indication that there could be more pressure to come, but the light volume trade had us taking Friday’s session with a grain of salt. The bull camp must defend $8.75-$8.78 ¾ this week, a failure to do so could spark another wave of selling and take us into the mid-$8.60s. We think the market is overdone in the near term and due for a relief rally, so we like buying support for a shorter-term trade. The bears have the longer-term advantage until the bulls can achieve consecutive closes back above $8.94 to $9.00 ¼.

Bias: Bullish/Neutral
Previous Session Bias: Bullish/Neutral
Resistance: 894-895 ¾**, 909 ½-913***
Support: 879-882**, 865-869 ½****

Chicago Wheat (ZWH)

Fundamentals: Wheat futures caught a bid on Friday on decent volume and many reporting concerns over winter weather sweeping through the Midwest, an odd occurrence for this time of year (sarcasm). The fundamentals are relatively mute in wheat as it appears money flow and technicals are the driving factors near term.
Technicals: Chicago wheat futures roared higher on Friday, taking out our 4-star resistance pocket from $5.38 ¼-$5.40. The bulls now need to defend this as support in the first half of the week. A failure to do so could encourage profit taking from the nearly 50¢ rally we’ve seen over the last two weeks. If the bulls can defend this support pocket, there’s not a lot of resistance until the June double top highs from $5.72 ¼-$5.73 ½. The chart is constructive, but we have a hard time getting overly excited about Chicago wheat in the mid-$5 range.

Bias: Neutral
Previous Session Bias: Neutral
Resistance: 538 ¼-540****
Pivot: 525 ¾-529 ¼
Support: 504 ½-508 ½***, 485 ½-489 ¼***

Kansas City Wheat (March)

Technicals: KC Wheat has been slowly grinding higher since making contract lows in September, the chart is extremely constructive and feels ready for a bigger move. The market tested our resistance pocket but failed to break out above it on Friday, we have defined that as 445 ½-449 ½. Consecutive closes above here could be the spark this market needs to encourage short covering from funds. The next resistance doesn’t come in until 465 ¼.

Bias: Bullish/Neutral
Previous Session Bias: Bullish/Neutral
Resistance: 449 ½451 ¼***, 465 ¼****
Support: 431-434 ½***, 422 ¾-423**, 411 ¾-413****

Cotton (March)

Technicals: The market worked lower in the overnight session but has managed to defend technical support, we’ve defined that as 64.52-65.00. So long as the bulls can defend this pocket, they will have the near-term advantage which could take us closer to the 67.00 handle.

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

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