The USDA report is in the past, what's next for grains?

CORN (March)

Yesterdays Close: March corn finished of a cent lower yesterday, trading in a range of 3 cents on the day. Funds were estimated buyers of 6,000 contracts for the session.

Fundamentals: Yesterdays USDA report showed US ending stocks at 2.352 billion bushels which compares to the previous read of 2.477 billion bushels; this as we saw exports increased by 125 million bushels. We will continue to watch the fluctuation of the US Dollar as it will have an impact on exports. World stocks came in at 203.1 million tonnes, this versus the previous read of 206.6 million tonne. Argentina production was down 3 million tonnes while Brazil was left unchanged. Overall the report seemed fairly friendly but perhaps the market had some of that priced in as we have made a strong rally over the past few weeks. Yesterdays export sales came in at, 769,600 metric tons, this was towards the top end of the expected range.

Technicals: The market made its way into our significant resistance pocket which we have had outlined in our reports as 366 -369. This pocket represents previous price points as well as key retracement levels. The RSI (relative strength index) was at levels we have not seen for this specific contract. We also had December new crop nearing $4 which may have sparked some producer selling. All of these together formed a bit of a lid on the market. If the market fails to breakout above here, we would expect to see the market retreat back to....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

SOYBEANS (March)

Yesterdays Close: March beans finished the day up 5 cents, trading in a range of 18 cents. Funds were estimated buyers of 9,000 contracts on the day.

Fundamentals: US ending stocks came in at 530 million bushels which was well above the 470 million bushels we saw in January. Poor exports get the blame for the increase in stocks. World ending stocks came in at 98.14 million metric tons, this was a notch below the January report which showed world stocks at 98.57 million metric tons. The Argentina crop was lowered, but that was offset by an increase in Brazil. The report was more bearish than closing prices would lead you to believe. Now that the report is behind us, attention will turn to weather in South America. Argentina is expected to get some rain but then dry out. Regardless of what happens, it is likely we see a gap Sunday night depending on weekend updates.

Technicals: In yesterdays report we mentioned not knowing who was in control in terms of the bulls and the bears as prices were trapped between support and resistance. Stops were tripped on both ends of that only to finish the day right back in the pocket between 980 and 988. We believe a close above or below those levels will lead to a move of at least....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

WHEAT (March)

Yesterdays Close: March wheat futures finished the day down 4 cents, trading in a range of 13 cents. Funds were estimated sellers of 6,000 contracts on the day.

Fundamentals:US ending stocks were increased from .989 billion bushels to 1.009 billion bushels, this is thanks to a drop in exports. World ending stocks came in at 266.1 million metric tons, this compares to the 268.02 metric tons we saw in the January report. Now that the report is behind us, traders will continue to keep an eye on the drought monitor. The lack of moisture has sparked short covering from funds which have reduced significantly over the last two weeks.

Technicals: The chart has become more constructive over the past several weeks but may be running out of steam. If the bulls cannot achieve a close above 456 , we expect to see the market retreat back towards....Please sign up for a Free Trial at Blue Line Futures to view our entire technical outlook and proprietary bias and levels.

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