Daily Grain & Cotton Commentary

Click this link to watch yesterday's interview with RFD-TV (Grains & Livestock)


Corn (December)

Fundamentals: December corn futures were softer to start the week as the lack of bullish headlines coupled with harvest pressure was too much for the bulls to overcome. Crop Progress was released after the close, showing corn conditions unchanged at 58% good/excellent. Harvest is said to be 52% complete, this is 2% behind expectations and 23% behind the five-year average. On deck is the weekly ethanol report and exports, but traders will quickly move past that and look to Fridays WASDE report as the big-ticket item. Early estimates are yields to be near 167.2 bushels per acre, down 1.2 from the previous report. Production estimates are coming in near 13.604 billion bushels, down from 13.779 in last months report.

Technicals: Yesterdays move lower wasnt what the bulls wanted to see, but not all hope is lost. Technical support remains intact and we feel that it still represents a good value, we have defined that pocket as 377-381 . A close below here would not only neutralize our bias, but it would be near term bearish too, opening the door for a potential retest of the mid 360s. On the resistance side of things, the bulls NEED to see consecutive closes back above 390-392 to encourage short covering from the funds.

Bias:Neutral/Bullish

Previous Session Bias:Bullish

Resistance: 390-392 ***, 400-402 ***, 412 -417 ****

Support: 377-381 ****, 363-366***


Soybeans (January)

Fundamentals: January soybean futures managed to hold their ground yesterday, despite weakness in corn and wheat. We noted in yesterdays interview with RFD-TV that the fundamental backdrop and money-flow has continued to be better for soybeans. Yesterdays Crop Progress report showed that harvest is now 75% complete, inline with expectations and just 12% behind the five-year average. Attention will now turn to Fridays WASDE report. Early estimates for yield come in near 46.6 bushels per acre, down from 46.9 in the previous report. Production is estimated to be at 3.512 billion bushels, down from the 3.550 in last months report.

Technicals: The technicals for soybeans remain very constructive in the near term, so long as the bulls can continue to defend technical support, defined as 921-928 . A close below here would neutralize our bias but would not be enough to flip to bearish. Our pivot pocket from 940-941 was tested yesterday but the bulls could not find the buyers to achieve a conviction close above. If the market can close above this pocket, we could see a swift run at the recent highs (also the June highs) near 960.

Bias: Bullish

Previous Session Bias:Bullish

Resistance: 953-959 ****, 973 -979 ***

Pivot: 940-941

Support: 921-928 ***, 899-906 ****


Chicago Wheat (December)

Fundamentals: Chicago wheat futures were under pressure yesterday due to technical selling and a lack of new bullish news on the wires. Yesterdays Crop Progress report showed the winter wheat crop is 89% planted, 2% behind expectations but 6% ahead of last years pace. Crop conditions came in at 57% good/excellent, 1% better than expectations.

Technicals: The market is failing to reclaim ground above our pivot pocket from 515 -517 . We have noted over the last week that a failure here could be the beginning of a bearish head and shoulders pattern. This week will be very important for the setting the tone on the technical landscape going forward.

Bias: Neutral/Bearish

Previous Session Bias:Neutral

Resistance: 525 -531 **, 538 -543****

Pivot: 515 -517

Support: 500-506 ****, 485 -489 ***


Kansas City Wheat (December)

Technicals: Kansas City wheat futures were little changed yesterday, keeping the momentum alive for the bull camp. The 100-day moving average comes in near 430, but the more significant resistance pocket we see comes in from 437-439 . On the support side of things, the bulls need to defend the pivot pocket at 420. A break below could lead us to retest the trendline near 410.

Bias: Bullish/Neutral

Previous Session Bias:Bullish/Neutral

Resistance: 437-439 ***, 454-457 ****

Pivot: 420

Support: 410-413****, 397-400***, 380*


Cotton (December)

Technicals: Cotton futures Traded lower yesterday, taking prices near our 4-star technical support pocket, 62.91-63.39. We have been writing about being patient for a pullback and using this pocket as an opportunity to consider buying. If the market can work a little more into our pocket and hold it on a closing basis, we will likely move our bias to outright bullish. A break and close below this pocket would neutralize our bias for the near term.

Bias: Neutral/Bullish

Previous Session Bias:Neutral/Bullish

Resistance: 65.85-66.05****, 68.35-68.60***

Support: 62.91-63.39****, 59.58-60.79***, 56.59-57.55****


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