Oliver Sloup breaks down the grain complex with his outlook for the week.
Corn (ZCZ)
Fundamentals: Corn futures caught some technical relief yesterday as the bull camp managed to defend the $3.30 support area. Yesterday’s weekly EIA ethanol report showed production dropped 23,000 barrels per day, ethanol stocks also declined. Weekly export sales came in at 220,600 metric tons for 2019/2020 were down 76% from the previous week and 56% from the prior four-week average.
Technicals: The market is lingering near significant support; we have defined that as $3.30 ¼-$3 32 ¼. A break and close below here opens the floodgates which could accelerate the selling down to contract lows, $3.22. The Bears have the technical advantage until the bulls can achieve consecutive closes back above technical resistance, $3.44.
Bias: Neutral
Previous Session Bias: Neutral
Resistance: 349 ¼-350***, 360-363 ½****
Pivot: 342-344
Support: 330 ¼-332 ¼***, 322**
Soybeans (ZSX)
Fundamentals: November soybean futures held support, with some help of export news from the USDA, to the tune of 926,000 metric tons. 66,000 metric tons to China for 2019/2020, 649,000 metric tons to China for 2020/2021, and 211,300 metric tons to unknown for 2020/2021. China has been showing up frequently for agricultural purchases despite the daily political rhetoric; moral of the story, watch what China does, not what they say. Export sales this morning came in at 365,200 MT for 2019/2020 were up 17% from the previous week, but down 31% from the prior four-week average.
Technicals: November soybeans pulled back to our significant pivot pocket, defined in previous reports as $8.86 ¾-$8.89 ¾. The bulls managed to defend this pocket and close off the lows, carrying over into moderate strength in the overnight/early morning trade. The bulls need to see prices chew through significant resistance to spark another wave higher, we see that as $9.05 ½-$9.11 ½.
Bias: Bullish/Neutral
Previous Session Bias: Bullish/Neutral
Resistance: 905 ½-911 ½****
Pivot: 886 ¾-889 ¾
Support: 866 ¼-873****
Chicago Wheat (ZWU)
Fundamentals: This morning’s export sales came in at 616,700 metric tons for 2020/2021 were down 19% from the previous week, but up 24% from the prior four-week average.
Technicals: Wheat futures rallied to our resistance pocket and briefly popped above it, on what appeared to be a fat finger trade around 1 p.m. CT; $5.32-$5.35 ½ remains intact, a close above this pocket could extend gains towards the recent highs, $5.51 ¾. A failure to close above resistance could take us back to retest the bottom end of the recent range, $5.17 ½-$5.23. If the Bulls fail to defend this pocket, we could be back near $5.00 in a short amount of time.
Bias: Neutral/Bearish
Previous Session Bias: Neutral/Bearish
Resistance: 532-535 ½***, 546 ¼-551 3/4 ***
Support: 517 ½-523****, 496 ½-500***
