Blue Line Express

Weekend Ag Update: Grains & Livestock

Corn

 

Last Week’s Close:  December corn futures finished Friday’s session unchanged, keeping prices in positive territory for the week by 11 ½ cents.  Friday’s Commitment of Traders report showed funds were buyers of 57,468 futures through October 2nd, trimming their net short position to 67,387.

 

Quick Take:  Corn futures spent 80% of the week ping-ponging between our support and resistance pockets which we have had defined as 363 (support) and 369 ¾ (resistance).  If the market achieves consecutive closes above the upper bands of resistance next week it is likely we will see another round of short covering from the funds.  The next resistance pocket comes in from 375 ¾-376 ¼.  Our bias was neutral much of last week and continues to be so going into this week’s trade until we get a new catalyst to give this market new direction, other than sideways.  There is a WASDE report, Thursday at 11am cst, we will have estimates out for you in the first half of the week.

 

Soybeans

 

Last Week’s Close: November soybean futures finished Friday’s session up 9 cents, extending gains for the week to 25 cents.  Friday’s Commitment of Traders report showed funds were buyers of 17,248 futures through October 2nd, trimming their net short position to 42,878 contracts.

 

Quick Take:  The market worked higher last week with some help from a seasonal trend and wet weather forecasts that cause some concern around potential harvest delays.  The move higher was halted by our technical resistance level at 870 ¾, this represents a key retracement on the year.  A conviction close above here opens the door for a bigger move higher via fund short covering.  The next significant resistance pocket doesn’t come in until 898 ¾-907.  There is a WASDE report, Thursday at 11am cst, we will have estimates out for you in the first half of the week.

 

Wheat

 

Last Week’s Close:  December wheat futures finished Friday’s session up 5 ¼ cents, extending gains for the week to 12 ½ cents.  Friday’s Commitment of Traders report showed funds sold 11,935 futures through October 2nd, putting them net short 11,708 futures.

 

Quick Take:  The market worked higher on the back of a bullish headline from Russia and spillover strength from corn and beans.  On the technical side of things, the bears remain in control, but the chart is becoming more neutral as we have now marked higher lows.  527 ¼ continues to be the upper band of resistance for us, this represents the 200-day moving average.  Above that level is the September 24th high of 531 ¼.  Until the bulls achieve consecutive closes above here, the bears have the edge.  If bulls are able to find footing, the will be looking for a move towards 539 ¾-540 ½, this pocket represents the 50- and 100-day moving average, as well as the 50% retracement from the December lows to the August highs.

 

Live Cattle

 

Last Week’s Close:  December live cattle futures finished Friday’s session down .10, putting prices in negative territory by .70 for the week.  Friday’s Commitment of Traders report showed funds bought 5,769 futures through October 2nd, expanding their net long position to 81,094 contracts. 

 

Quick take:  For several months the market was trading in a range from 111-116, the mid-September breakout has moved that range up in our mind. The new trading range we are looking at is 116 (previous resistance)-120.  The bull camp has an advantage on the chart, marking higher lows and higher highs.  The fundamental side of things isn’t as friendly as the chart, but things don’t look overly bearish.  We will look to play the range until we get a technical breakout or breakdown.  If you believe that the market will be range bound too, there are several option strategies to consider implementing.

 

Feeder Cattle

 

Last Week’s Close:  November feeder cattle futures finished Friday’s session up .65, putting prices in positive territory by .35.  Friday’s Commitment of Traders report showed funds bought 1,164 futures through October 2nd, expanding their net long position to 4,783 contracts. 

 

Quick Take:  Much like live cattle, we feel that feeder cattle have more or less established a new higher range.  Previous resistance and the breakout point near 156 will now act as significant support.  On the resistance side of things, 160 remains the technically significant and psychologically significant level to watch.  We will look to play the range next week, so with prices near the middle there is not much to do in our opinion.  If you believe that the market will be range bound too, there are several option strategies to consider implementing.

 

Lean Hogs

 

Last Week’s Close:  December lean hogs finished Friday’s session up 2.25, shrinking losses for the week to just .30.  Friday’s Commitment of Traders report showed funds bought 6,503 futures through October 2nd, expanding their net long position to 36,246 contracts.

 

Quick Take:  Lean hog futures rolled over hard mid-week but managed to claw back some of those losses in the final session of the week.  We managed to post higher lows on the pullback which keeps the bull trend of higher lows and higher highs intact.  First resistance next week comes in from 58.20-58.65, a move above here takes us back towards that psychologically significant barrier at 60.00.  If the bulls cannot achieve follow through momentum in the first half of next week, we could see some near-term consolidation. 

 

 

 

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Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.