What does the USDA report mean for grain prices?
Oliver Sloup of Blue Line Futures - InsideFutures.com - Sat Jan 13, 10:42AM CST

Grain Express

CORN (March)

Yesterdays Close: March corn futures trade 1 cents lower yesterday, trading in a range of 4 cents on the session. Funds were estimated sellers of an estimate 13,000 contracts.

For the week: March corn futures finished the week down 4 cents, trading in a range of 6 cents. Fridays Commitment of Traders report showed funds have a net short position of 222,516 futures and options. Keep in mind that the CoT data is compiled, and funds have likely exceeded their previous record short of 230,556 futures and options.

USDA Report in Review

Quarterly stocks:12.516 billion bushels vs the average estimate of 12.431 billion bushels

Ending Stocks: 2.437 billion bushels vs the average estimate of 2.431 billion bushels

Yield:Increased by 1.2 bushels to 176.6

Production: Increased by .026 to 14.604 billion bushels

Technicals

March corn futures made new lows yesterday but managed to close above technical support which we have outlined as 345-346 for some time now. Though we have been range bound for the better part of the last 5 months, the bears have the edge as lower highs and lower lows have been the trend. If we see a break and close below 345, we would expect to see a continuation towards 334-335 . The only silver lining for the bulls is that the funds could spark a rally from short covering. If youve been banking on this for a while youve been disappointed. The funds previous record short position was reduced by 70k contracts and the market only rallied roughly 4 cents off of contract lows. If funds start reducing, it doesnt mean the flip. The trend is your friend, and right now that is sideways. We continue to feel that....Please sign up for a Free Trial at Blue Line Futures in order to view our entire technical outlook and proprietary bias and levels.

SOYBEANS (March)

Yesterdays Close: March soybean futures finished Fridays session up 13 cents, trading in a range of 18 cents. Funds were estimated buyers of 11,000 contracts on the session.

For the week: March soybean futures finished the week down 7 cents, trading in a range of 27 cents. Fridays Commitment of Traders report showed that funds have a net short position of 92,835 futures and options, this is their 5th largest short position on record and the most since June when we bottomed. Keep in mind that the CoT data is compiled through Tuesday.

USDA Report in Review

Quarterly stocks:3.157 billion bushels vs the average estimate of 3.181 billion bushels

Ending Stocks:470 million bushels vs the average estimate of 472 million bushels

Yield:Decrease by .4 bushels to 49.1

Production: Decreased by .033 to 4.392 billion bushels

Technicals

The chart has been ugly, theres no way to sugar coat that, but we have continued to suggest there is value at these levels. We know that funds have a rather large net short position, it often seems funds dont hold that large of a short position in beans as opposed to corn and wheat. We recommended using cheap call options last week and to start looking at futures from 950-952 . Fridays report could be the spark that gets the market going in the right direction. If we see a close back above 971 , we expect to see additional momentum press prices towards our next resistance pocket from....Please sign up for a Free Trial at Blue Line Futures in order to view our entire technical outlook and proprietary bias and levels.

WHEAT (March)

Yesterdays Close: March wheat futures closed 13 cents lower yesterday, trading in a range of 17 cents. Funds were estimated sellers of 10,500 contracts.

For the week: March wheat futures finished the week 10 cents lower, trading in a range of 16 cents.

USDA Report in Review

Quarterly Stocks: 1.874 billion bushels vs the average estimate of 1.849 billion bushels

Ending Stocks: .989 billion bushels vs the average estimate of .959 billion bushels

Winter Wheat Seedings: 32.608 million acres vs estimates of 31.107 million acres.

Technicals

Wheat futures failed to get above our first resistance pocket this week from 434-437 . The bearish report opened the door to our three star support we have been writing about and referenced on RFD-TV this week, that comes in from 416 -420 . A close below here opens the door to...Please sign up for a Free Trial at Blue Line Futures in order to view our entire technical outlook and proprietary bias and levels.

Sign up for 1 or all 5 of our daily Blue Line Express commodity reports!

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.