Fundamentals: Corn was softer last week as bullish headlines dissipated and buyers looked to lock in gains on what was a buy the rumor, sell the news event the previous Friday (winter storm/trade talks). Crop progress will be out after the close, market participants are looking for harvest to be 33% complete, 9% behind the 5-year average. Harvest reports will continue to be a key focus over the coming weeks, there seems to be a trend of underwhelming yields. Fridays Commitment of Traders report showed funds are short 66,141 contracts, a reduction of 24,527 contracts.
Technicals: The market spent much of last weeks trade retreating, which we actually view as constructive so long as the bulls can defend technical support. We have defined our pivot pocket as 390-392 (previously resistance). If the bulls can continue to defend this level on a closing basis, we expect to see higher highs in the near future. A failure to defend our pivot pocket opens the door for a run at 377-381 , a MUST hold pocket for the bulls to remain in control.
Previous Session Bias: Bullish
Resistance: 400-402 ***, 412 -417 ****
Support: 377-381 ****, 363-366***
Fundamentals: November soybean futures traded in a wide range last week as traders took profits early in the week but looked to step back in, in the back half of the week. Fridays Commitment of Traders report showed funds bought 42,528 contracts, expanding their net long position to 49,029. The news wires have been slow over the last week, but the money flow continues to be constructive for the technical landscape. Crop Progress will be out after the close, estimates are for harvest to be 38% complete, 26% behind the five-year average.
Technicals: Higher lows and higher highs has been the trend for the last month and a half, taking prices to their highest levels since the June highs, 948-950. If the bulls can achieve consecutive closes above this pocket, we could see an extension towards 963 -969 , the top end of the range from February. The bull camp remains in control until we start seeing consecutive closes below support near 920.
Previous Session Bias: Bullish/Neutral
Resistance: 948-950****, 963 -969 ***
Pivot: 936 -938
Support: 915 -920***, 899-906 ****
Chicago Wheat (December)
Fundamentals: Chicago wheat futures staged a huge rally last week, much of that on the back of technical short covering. Fridays Commitment of Traders report showed funds bought 8,573 contracts, trimming their net short position to 10,564 contracts. The U.S. dollar has been getting the snot kicked out of it for the last two-weeks, a positive tailwind for the wheat market.
Technnicals: The market launched higher last week, taking us to resistance from 538 -543. This pocket represents the July highs and the 50% retracement from the contract highs to the contract lows (middle of the range). With prices testing resistance and the RSI in overbought territory, we could see the rally halted.
Previous Session Bias: Neutral
Resistance: 538 -543***, 561-565 ****
Pivot: 525 -531
Support:515 **, 500-506 ****
Kansas City Wheat (December)
Technicals: Kansas City wheat futures have been firming up over the last month and a half but are still lagging the Chicago contract as that spread continues to widen. According to Fridays Commitment of Traders report, funds are still short 23,353 contracts. Prices are coming up against technical resistance from 437-439 , this pocket represents a key retracement and the 100-day moving average. If the bulls can achieve consecutive closes above here, we could see a run towards the 50% retracement, 454.
Previous Session Bias:Neutral/Bullish
Resistance: 437-439 ***, 454-457 ****
Support: 415 -420**, 397-400***, 380*
Fundamentals: December cotton futures managed to hold a strong rally in the back half of last week as traders become more optimistic on demand and more pessimistic on supply. Export sales last week backed that theory with the USDA showing an increase of 9% from the previous week and an increase of 36% from the 4-week average. Fridays Commitment of Traders report showed funds bought 8,161 contracts through October 15th, trimming their net short position to 15,887 contracts.
Technicals: The market is stalling out in our 4-star resistance pocket, we have had that defined as 65.00-65.85. If the bulls can achieve consecutive closes above here, we could see an extension towards 68.35-68.60. Higher lows and higher highs have been the trend and we expect to see that continue. Bulls remain in total control until we start seeing closes back below 61.72-62.50.
Previous Session Bias:Neutral/Bullish
Resistance: 65.00-65.85****, 68.35-68.60***
Support: 61.72-62.50****, 59.58-60.79***, 56.59-57.55****