Demand destruction from Coronavirus is a possibility for ag markets. Oliver Sloup provides update.
Fundamentals: Corn futures are softer this morning as outside market weakness is spilling over into the commodity sectors. Expect this to be the new norm until fears of Coronavirus subside. Weekly export sales came in at 769,200 metric tons for 19/20, 42% higher than the previous week and 27% above the four-week average.
Technicals: Corn futures saw follow through buying yesterday on what was mostly technical short covering from the funds, trading as much as 21¢ off the lows from just four sessions ago! Technical resistance remains intact from 388-392, this pocket represents the 50 and 100 day moving average, along with a key Fibonacci retracement.
Bias: Neutral/Bullish
Previous Session Bias: Neutral/Bullish
Resistance: 388-392****, 398 ¾-400***
Support: 370-374 ¾****, 365 ¾**, 352 ¼-355**
Soybeans (ZSK)
Fundamentals: May soybean futures continued to march higher yesterday but are turning in the early morning trade as outside market weakness spills into commodities. Weekly export sales this morning came in at 345,000 metric tons for 19/20, up 2% from last week but 35% below the four-week average.
Technicals: Futures poked their head above our picot point yesterday but failed to hold into the close, that comes in at $9.10 ¼ and represents the top end of the range from February. The market is now slipping back towards first support which we have defined as $8.98 ¼ to $9.00. At these prices, we don’t see much in terms of a solid risk/reward trade, so we are keeping our bias at Neutral.
Bias: Neutral
Previous Session Bias: Neutral
Resistance: 914-917****, 928-930 ¾***
Pivot: 910 ¼
Support: 898 ¼-900***, 890-890 ¾**, 878-880****
Chicago Wheat (ZWK)
Fundamentals: Export sales this morning came in at 542,400 metric tons for 19/20, this is 42% higher than last week and 27% above the four-week average.
Technicals: Chicago wheat futures continue to look dreadful as the retreat towards the low end of the recent range. Technical support comes in from $5.10 to $5.12 ¼, a break and close below here opens the door for a potential “whoosh” lower.
Bias: Bearish/Neutral
Previous Session Bias: Bearish/Neutral
Resistance: 523-528 ½***, 540 ½-542 ½****
Support: 510-512 ¼***, 497 ¼-501****
Kansas City Wheat (May)
Technicals: Kansas City wheat futures continue to look weak, but the chart offers more support relative to the Chicago contract. Our bias is Neutral now, we’d be looking to sell rallies. If you want to be long wheat, the KC contract against Chicago may be your best bet.
Bias: Neutral
Previous Session Bias: Neutral
Resistance: 463-468***, 480-483 ¼****
Support: 450-455 ½***, 430-431 ½****
Cotton (May)
Technicals: Cotton futures failed to hold onto gains yesterday and so far, this morning, not the best sign for the bull camp. The bulls must reclaim ground above the 65 handle to neutralize the bearish chart. Outside markets will continue to be a near term focal point.
Resistance: 64.88-65.15****, 69.72-70.20***, 72.28-73.08***
Support: 59.26-60.18****
Bill Baruch provides technical levels on all markets throughout the week at BlueLineFutures.com. Sign up for a complimentary two-week trial of 1 or all 6 of our daily Blue Line Express commodity reports!Please sign up at Blue Line Futures to have our research emailed to you each morning.
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