Technically Speaking
Darin Newsom DTN Senior Analyst

Saturday 03/21/15

Weekly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.63, up $0.06 for the week. Despite the higher close, technical indicators continue to show the secondary (intermediate-term) trend is down. However, last week saw the NCI.X rally off its test of support at $3.47, a price that marks the 33% retracement level of the uptrend from $2.81 through the high of $3.80, before rallying to a higher close. This creates a possible break of initial resistance at $3.68 leading to a retest of longer-term resistance at $3.84. This price marks the 50% retracement level of the secondary downtrend from $4.86 through the $2.81 low.

Corn (Old-crop): The May contract closed 4.50cts higher at $3.85 last week. Technical indicators continue to show the secondary (intermediate-term) trend is down. However, May corn posted a solid rally off support near $3.68, a price that marks the 67% retracement level of its previous secondary uptrend from $3.39 1/4 through the high of $4.25 1/4. A retest of this support could pull weekly stochastics below the oversold level of 20%, setting up a potential bullish crossover that could lead to the next secondary uptrend.

Corn (New-crop): The December contract closed 4.50cts higher at $4.09 1/4 last week. Similar to old-crop May and the NCI.X, Dec corn technical indicators continue to show the secondary (intermediate-term) trend is down. Again like the other corn markets though, the contract was able to post a solid rally off its support near $3.91 1/2, a price that marks the 67% retracement level of its previous secondary uptrend from $3.64 1/4 through the high of $4.40. A test of last week's low ($3.92 1/2) could be enough to pull weekly stochastics below the oversold level of 20%.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.27, down 1 cent for the week. The secondary (intermediate-term) trend remains sideways despite the fact the NSI.X posted a new low of $9.08. The solid rally to close at the weekly high could possibly establish a spike reversal of a double-bottom low ($9.12 and $9.08). Initial resistance remains at the recent high of $9.84, then the range high of $10.02. A bearish move confirming the new low could send the NSI.X back to its previous low of $8.50.

Soybeans (old-crop): The May contract closed 0.25ct lower at $9.73 3/4 last week. While the secondary (intermediate-term) trend remains sideways, the move below the previous low of $9.61 3/4 sets the stage for renewed selling to take May beans back to a test of its contract low at $9.28 3/4. If the contract finds follow-through buying interest, resistance is at the recent high of $10.39.

Soybeans (new-crop): The November contract closed 3.00cts higher at $9.56 1/4 last week. The secondary (intermediate-term) trend remains sideways, with last week's rally off the low of $9.39 possibly establishing a double-bottom (the previous low was $9.40). However, the fact the Nov beans moved to a new low last week could open the door to additional selling and a test of the contract low of $9.27 1/2.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $5.03, up 27 cents for the week. The SR.X has posted a strong rally off its recent low of $4.55, but has not established a new 4-week high that would confirm a move to a secondary (intermediate-term) uptrend. This could occur soon given that the new 4-week high is last week's close of $5.03. If so, initial resistance is at $5.11, the 33% retracement level of the secondary downtrend from $7.11 through the low of $4.25.

SRW Wheat (old-crop): The May Chicago contract closed 28.00cts higher at $5.30 last week. Despite the strong two-week rally off its contract low of $4.78 1/4, May Chicago wheat has not broken out of its secondary (intermediate-term) sideways trend. However, this could occur soon with a move above last week's high (also the new 4-week high) of $5.30 1/2. Weekly stochastics established a bullish crossover below the oversold level of 20%, indicating momentum has changed. If a secondary uptrend is confirmed initial resistance is near $6.04 1/2, a price that marks the 33% retracement level of the previous downtrend from $8.57 1/2.

HRW Wheat (new-crop): The July Kansas City contract closed 31.25cts higher at $5.75 last week. As with cash and old-crop wheat, the new-crop July Kansas City contract is on the verge of confirming a secondary (intermediate-term) uptrend. All that is needed is a move above last week's high, now the 4-week high, of $5.75 1/2. Weekly stochastics have already established a bullish crossover below the oversold level of 20%. If an uptrend is confirmed, initial resistance is pegged near $6.21 3/4. This price marks the 33% retracement level of the previous secondary downtrend from $8.20 through the contract low of $5.22 3/4.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 2:23PM CDT 03/21/15 by Darin Newsom
 
Weekly Analysis: Livestock Markets

Live Cattle: The June contract closed $5.200 higher at $150.475 last week. The secondary (intermediate-term) trend remains up with resistance pegged between $150.75 and $154.825, the 50% and 67% retracement levels respectively of the previous secondary downtrend from $162.925 through the low of $138.60. Given the continued bullish commercial outlook indicated by the futures spreads, a test of the 67% retracement likely.

Feeder Cattle: The May contract closed $5.675 higher at $215.40 last week. The secondary (intermediate-term) trend remains up. The contract has moved above resistance near $215.10, a price that marks the 50% retracement level of the previous downtrend from $236.325 through the recent low of $193.90, and could now target the 67% retracement level near $222.20.

Lean hogs: The June contract closed $1.575 lower at $73.85 last week. The secondary (intermediate-term) trend remains down. Stochastics continue to indicate an oversold situation, setting the stage for a possible bullish crossover in coming weeks.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.63, up $0.06 for the week. Despite the higher close, technical indicators continue to show the secondary (intermediate-term) trend is down. However, last week saw the NCI.X rally off its test of support at $3.47, a price that marks the 33% retracement level of the uptrend from $2.81 through the high of $3.80, before rallying to a higher close. This creates a possible break of initial resistance at $3.68 leading to a retest of longer-term resistance at $3.84. This price marks the 50% retracement level of the secondary downtrend from $4.86 through the $2.81 low.

Soybean meal: The May contract closed $3.00 lower at $324.00 last week. The secondary (intermediate-term) trend remains sideways. Resistance is at the recent high of $351.70, a test of the 50% retracement level ($351.00) of the previous downtrend from $409.60 through the low of $292.30. Support is at $314.30, the 67% retracement level of its rally from $292.30 through the high of $358.50.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom


Commodity trading is very complicated and the risk of loss is substantial. The author does not engage in any commodity trading activity for his own account or for others. The information provided is general, and is NOT a substitute for your own independent business judgment or the advice of a registered Commodity Trading Adviser.

Posted at 1:39PM CDT 03/21/15 by Darin Newsom
 
Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $0.65 higher at $55.32. The secondary (intermediate-term) trend remains up with the spot-month closing above technical support at $54.09. This price marks the 50% retracement level of the initial rally from $45.19 through the high of $63.00. Weekly stochastics remains bullish indicating a retest of resistance at $62.22 is possible.

Crude Oil: The spot-month contract closed $0.88 higher at $45.72. Last week's move to a new low of $42.03 would indicate the market remains in a secondary (intermediate-term) downtrend. However, the spot-month contract was able to rally to a higher close, hinting at a possible spike reversal on the weekly chart (the monthly chart continues to indicate a major downtrend). Weekly stochastics also turned bullish again implying a potential bullish change in momentum.

Distillates: The spot-month contract closed 2.13cts higher at $1.7343. The secondary (intermediate-term) trend remains sideways with support at the previous low of $1.5890. Weekly stochastics are short-term bearish, though the last secondary signal was a bullish crossover below the oversold level of 20%.

Gasoline: The spot-month contract closed 3.55cts higher at $1.7978. The secondary (intermediate-term) trend remains up, with the recent sell-off resulting in a test of support at $1.6909. This price marks the 38.2% retracement level of the initial rally from $1.2265 through the high of $1.9779. Resistance remains between $2.0060 and $2.2469, the 38.2% and 50% retracement levels respectively of the previous secondary downtrend from $3.2672.

Ethanol: The spot-month contract closed 4.5cts higher at $1.4890. The secondary (intermediate-term) remains sideways as the spot-month contract consolidates between $1.5400 and $1.2920. Weekly stochastics are now bullish, indicating the market is working toward a bullish breakout. If this occurs the target price would be $1.7880, adding the range of the sideways trend ($1.5400 - $1.2920 = $0.2980) to the breakout point ($1.5400).

Natural Gas: The spot-month contract closed 5.9cts higher at $2.786. The secondary (intermediate-term) trend remains sideways. Weekly stochastics are neutral to bullish below the oversold level of 20%. Resistance remains at the recent high of $3.039 with support at the low of $2.567, creating a range of 47.2cts.

Propane (Conway cash price): Conway propane closed 1.87cts lower at $0.4588. Despite another lower weekly close the secondary (intermediate-term) trend remains up. Cash propane held support at $0.4466, a price that marks the 67% retracement level of the rally from $0.3775 through the recent high of $0.5850.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 1:08PM CDT 03/21/15 by Darin Newsom
 

Saturday 03/14/15

Weekly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.57, down $0.04 for the week. The secondary (intermediate-term) trend remains down with the last signal a bearish crossover by weekly stochastics the week of December 29. The NCI.X fell back from its test of resistance at $3.68, the 67% retracement level of its initial sell-off from $3.80 through the low of $3.44, setting the stage for another test of support at $3.47. This price marks the 33% retracement level of the uptrend from $2.81 through the $3.80 high.

Source: DTN ProphetX

Corn (Old-crop): The May contract closed 5.50cts lower at $3.80 1/2 last week. Weekly stochastics remain bearish indicating the secondary (intermediate-term) trend is down. May corn closed below initial support at $3.82 1/4, the 50% retracement level of the uptrend from $3.39 1/4 through the high of $4.25 1/4. Given the neutral to bearish carry in the May to July futures spread, the May contract should find solid support above the 67% retracement level near $3.68. Friday's weekly CFTC Commitments of Trader report showed noncommercial traders reduced their net-long futures position by another 18,773 contracts, adding 16,082 contracts to their short position.

Corn (New-crop): The December contract closed 6.00cts lower at $4.04 3/4 last week. Weekly stochastics remain bearish indicating the secondary (intermediate-term) trend is down. Given the continued neutral level of carry in the December 2015 to March 2016 futures spread Dec corn should find support between $4.03 1/2 and $3.91 1/2. These prices mark the 50% and 67% retracement levels of the previous uptrend from $3.64 1/4 through the high of $4.40.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.28, down 10 cents for the week. The secondary (intermediate-term) trend remains sideways with support at the recent low of $9.12. However, the last signal established by weekly stochastics was a bullish crossover the week of October 13 indicating the NSI.X should eventually see a move into a stronger uptrend. The upside target remains near $10.98, a price that marks the 38.2% retracement level of the downtrend from $14.97 through the low of $8.50.

Soybeans (old-crop): The May contract closed 11.00cts lower at $9.74 last week. While the secondary (intermediate-term) trend remains sideways, May soybeans are testing trendline support pegged last week near $9.73 1/2. A move below this price could lead to a sell-off back to its previous low of $9.61 3/4, if not the contract low of $9.28 3/4. Weekly stochastics are neutral to bearish, though the last secondary signal remains a bullish crossover below the oversold level of 20% (week of October 6). Soybeans continue to be driven by support from commercial traders, as indicated by the weak carry in both the old-crop and new-crop forward curves, and pressure from noncommercial interests. Friday's CFTC Commitments of Traders report showed the latter group moving back to a net-short futures position of 8,393 contracts by liquidating 15,564 contracts of their long position.

Soybeans (new-crop): The November contract closed 12.00cts lower at $9.53 1/4 last week. Weekly stochastics established a bearish crossover above the oversold level of 20%, indicating the secondary (intermediate-term) trend has turned sideways. The contract has moved through technical support levels and could now target trendline support pegged near $9.44 1/2. While the commercial outlook remains bullish, pressure continues to come from noncommercial selling. A move below trendline support could lead to a test of the previous low of $9.40, then the contract low of $9.27 1/2.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.76, up 20 cents for the week. While there are no clear signals that the secondary (intermediate-term) downtrend has come to an end, last week's rally indicates a possible move to a sideways trend with support at the recent low of $4.55 and resistance at $5.11. The latter marks the 33% retracement level of the downtrend from $6.23 (week of December 15). Weekly stochastics are nearing a bullish crossover below the oversold level of 20%.

SRW Wheat (old-crop): The May Chicago contract closed 19.50cts higher at $5.02 last week. Similar to the SR.X (DTN National SR Wheat Index, national average cash price), the May futures contract looks to be moving into a sideways trend. Support is at the recent low of $4.78 1/4 with resistance at the 4-week high of $5.45. Weekly stochastics are nearing a bullish crossover below the oversold level of 20%.

HRW Wheat (new-crop): The July Kansas City contract closed 16.25cts higher at $5.43 3/4 last week. July Kansas City wheat rallied off its recent low of $5.22 3/4, indicating the secondary (intermediate-term) trend may be turning sideways. If so support is at the low of $5.22 3/4 while resistance remains at the 4-week high of $5.86. Weekly stochastics are nearing a bullish crossover below the oversold level of 20%.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, March 10.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 8:54AM CDT 03/14/15 by Darin Newsom
 
Weekly Analysis: Livestock Markets

Live Cattle: The June contract closed $1.825 lower at $145.275 last week. Despite the lower close the secondary (intermediate-term) trend is up. The contract fell back from its test of resistance at $146.70, the 33% retracement level of the downtrend from $162.925 through the low of $138.60, to test support near $145.65. This price marks the 33% retracement of the rally off the $138.60 low through last week's high of $147.675. Next support is at the 50% retracement level near $143.15.

Feeder Cattle: The May contract closed $2.275 higher at $209.725 last week. The secondary (intermediate-term) trend remains up. The contract has moved above initial resistance near $208.05, a price that marks the 33% retracement level of the previous downtrend from $236.325 through the recent low of $193.90, and could now target the 50% retracement level near $215.10.

Lean hogs: The June contract closed $4.625 lower at $75.425 last week. The move to a new low of $73.50 reestablished the secondary (intermediate-term) downtrend. However, the contract was able to rally off its new low, and with stochastics indicating a continued oversold situation, could set the stage for a possible bullish crossover in the coming weeks. If so, this would be a secondary (confirming signal) indicating the contract could establish a spike reversal.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.57, down $0.04 for the week. The secondary (intermediate-term) trend remains down with the last signal a bearish crossover by weekly stochastics the week of December 29. The NCI.X fell back from its test of resistance at $3.68, the 67% retracement level of its initial sell-off from $3.80 through the low of $3.44, setting the stage for another test of support at $3.47. This price marks the 33% retracement level of the uptrend from $2.81 through the $3.80 high.

Soybean meal: The May contract closed $0.70 lower at $327.00 last week. A bearish crossover by weekly stochastics above the oversold level of 20% indicates the secondary (intermediate-term) trend has turned sideways. Resistance is at the recent high of $351.70, a test of the 50% retracement level ($351.00) of the previous downtrend from $409.60 through the low of $292.30. The May contract is testing support at $325.40, the 50% retracement level of its rally from $292.30 through the high of $358.50. The trendline connecting the $292.30 low and the $314.50 low (week of January 20) projects support at $325.60.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom


Commodity trading is very complicated and the risk of loss is substantial. The author does not engage in any commodity trading activity for his own account or for others. The information provided is general, and is NOT a substitute for your own independent business judgment or the advice of a registered Commodity Trading Adviser.

Posted at 7:56AM CDT 03/14/15 by Darin Newsom
 
Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $5.06 lower at $54.67. Despite the lower close the secondary (intermediate-term) trend remains up with weekly stochastics bullish. The spot-month contract has fallen back from its test of resistance at $62.22, a price that marks the 23.6% retracement level of the previous downtrend from $117.34 through the low of $45.19. Support is at $54.09, the 50% retracement level of the rally from $45.19 through its recent high of $63.00.

Crude Oil: The spot-month contract closed $4.77 lower at $44.84. The secondary trend remains sideways though the spot-month contract fell to within striking distance of its previous low of $43.58. If this price fails to hold the target price becomes $32.92. This price is arrived at by taking the range of the previous sideways trend ($54.24 - $43.58 = $10.66) and subtracting it from the previous low.

Distillates: The spot-month contract closed 15.60cts lower at $1.7130. The secondary (intermediate-term) trend has turned sideways with last week's sell-off resulting in a bearish crossover by weekly stochastics above the oversold level of 20%. Support is at the previous low of $1.5890.

Gasoline: The spot-month contract closed 11.96cts lower at $1.7623. Despite last week's sell-off the secondary (intermediate-term) trend remains up. However, the spot-month contract has fallen back from its test of resistance at $2.0060, a price that marks the 38.2% retracement level of the previous downtrend from $3.2672 through the low of $1.2265. Initial support is at $1.6909, the 38.2% retracement level of the rally from $1.2265 through the recent high of $1.9779.

Ethanol: The spot-month contract closed 1.6cts lower at $1.4440. The secondary (intermediate-term) remains sideways as the spot-month contract consolidates between $1.5400 and $1.2920. Weekly stochastics are now bullish, having climbed above the oversold level of 20%. If this leads to a bullish breakout the target price would be $1.7880, again adding the range of the sideways trend ($1.5400 - $1.2920 = $0.2980) to the breakout point ($1.5400).

Natural Gas: The spot-month contract closed 11.2cts lower at $2.727. The secondary (intermediate-term) trend remains sideways. Weekly stochastics are neutral to bullish below the oversold level of 20%. Resistance remains at the recent high of $3.039 with support at the low of $2.567, creating a range of 47.2cts.

Propane (Conway cash price): Conway propane closed 6.0cts lower at $0.4775. Despite last week's sell-off the secondary (intermediate-term) trend remains up. Cash propane is testing support at $0.4812, a price that marks the 50% retracement level of the rally from $0.3775 through the recent high of $0.5850.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 7:27AM CDT 03/14/15 by Darin Newsom
 

Saturday 03/07/15

Weekly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.62, down $0.04 for the week. The secondary (intermediate-term) trend remains down with the last signal a bearish crossover by weekly stochastics the week of December 29. After falling to a low of $3.44, a test of technical support at $3.47, the NCI.X has moved sideways. Weekly stochastics remain neutral to bearish hinting at a second test of support at $3.47.

Corn (Old-crop): The May contract closed 2.25cts lower at $3.86 last week. Weekly stochastics remain bearish indicating the secondary (intermediate-term) trend is down. Support remains pegged between $3.82 1/4 and $3.72, prices that mark the 50% and 61.8% retracement level of the previous uptrend from $3.39 1/4 through the high of $4.25 1/4. Support from the commercial side of the market continues to be offset by noncommercial selling, with Friday's weekly CFTC Commitments of Trader report showing the latter group reducing their net-long futures position by another 16,061 contracts.

Corn (New-crop): The December contract closed 6.75cts lower at $4.10 3/4 last week. Weekly stochastics remain bearish indicating the secondary (intermediate-term) trend is down. Given the continued neutral view of new-crop supply and demand indicated by the carry in the December 2015 to March 2016 futures spread, Dec corn could fall back to a test of support at $4.03 1/2. This price marks the 50% retracement level of the previous uptrend from $3.64 1/4 through the high of $4.40. Support at the 67% retracement level is near $3.91 1/2.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.38, down 46 cents for the week. The previous week's spike high failed to generate follow-through buying enthusiasm, meaning the NSI.X was not able to establish a bullish breakout above its previous high of $10.02. Indications are that the secondary (intermediate-term) trend remains sideways with support at the recent low of $9.12. However, the last signal established by weekly stochastics was a bullish crossover the week of October 13 indicating the NSI.X should eventually see a move into a stronger uptrend. The upside target remains near $10.98, a price that marks the 38.2% retracement level of the downtrend from $14.97 through the low of $8.50.

Soybeans (old-crop): The May contract closed 46.75cts lower at $9.85 last week. May soybeans fell back from its recent test of resistance near $10.48, a price that marks the 33% retracement level of the previous downtrend from $12.87 through the low of $9.28 3/4. Last week's sharp sell-off resulted in a test of support near $9.77 1/2, the 50% retracement level of the rally from the previous low through the high of $10.75, as well as weekly trendline support near $9.71 1/2. A failure to hold this support could send the contract back to its previous low. While Friday's weekly CFTC Commitments of Traders report showed noncommercial interests moving to a small net-long futures position, pressure came from renewed commercial selling. Still, the weak carry in the May to July futures spread continues to indicate a neutral to bullish commercial outlook.

Soybeans (new-crop): The November contract closed 32.25cts lower at $9.65 1/4 last week. Despite the lower close the secondary (intermediate-term) trend remains up. Nov soybeans were able to hold support near $9.65 at the close, a price that marks the 67% retracement level of the rally from $9.27 1/2 through the high of $10.39 3/4. The weak carry in the new-crop forward curve (November 2015 through July 2016 contracts) continues to indicate a long-term bullish commercial outlook. Initial resistance remains between $10.29 and $10.43 3/4, prices that marks the 33% and 38.2% retracement levels of the previous downtrend from $12.32 through the contract low of $9.27 1/2.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.56, down 32 cents for the week. The secondary (intermediate-term) trend is down with a move to a new low by the SR.X. Though the market is oversold with weekly stochastics well below 20%, next support is at the low of $4.25 (week of September 22, 2014).

SRW Wheat (old-crop): The May Chicago contract closed 30.50cts lower at $4.82 1/2 last week. May Chicago wheat posted a new contract low of $4.78 1/4 despite weekly stochastics showing the market to be sharply oversold. Friday's weekly CFTC Commitments of Traders report showed noncommercial interests increased their net-short futures holding by 5,839 contracts. Major (long-term) support is at the September 2014 low of $4.66 1/4.

SRW Wheat (new-crop): The July Chicago contract closed 30.25cts lower at $4.86 1/2 last week. July Chicago wheat posted a new low of $4.84 1/2 despite extending the secondary (intermediate-term) downtrend. However, weekly stochastics well below the 20% level continue to indicate the contract is sharply oversold.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, March 2.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 9:58AM CST 03/07/15 by Darin Newsom
 
Weekly Analysis: Livestock Markets

Live Cattle: The April contract closed $2.95 higher at $154.65 last week. The secondary (intermediate-term) trend is up. Last week's spike reversal off the low of $145.30, a test of support near $145.825, established a bullish crossover below the oversold level of 20% by weekly stochastics and signaled the end of Wave C of the downtrend that began with the $171.00 high (week of November 17). Initial resistance is near $155.15, the 38.2% retracement of the previous downtrend, though the continued bullish supply and demand indicated by the strength of the April June spread implies a possible test of the 50% and 61.8% retracement levels off $158.20 and $161.25.

Source: DTN ProphetX

Feeder Cattle: The May contract closed $8.575 higher at $207.45 last week. The secondary (intermediate-term) trend is up. Initial resistance is near $208.05, a price that marks the 33% retracement level of the previous downtrend from $236.325 through the recent low of $193.90. The 50% retracement level is near $215.10.

Lean hogs: The April contract closed $1.35 lower at $66.125 last week. Despite the sell-off the secondary (intermediate-term) trend remains up based on the bullish key reversal posted the week of February 17. Support at that week's low of $63.225 should continue to hold, with initial resistance still pegged at $71.349. This price marks the 23.6% retracement level of the previous downtrend from $97.65. Given the weakness of the April to June futures spread, the April contract should have a difficult time seeing much more than a 33% retracement of its previous downtrend, putting the high side target near $74.70.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.62, down $0.04 for the week. The secondary (intermediate-term) trend remains down with the last signal a bearish crossover by weekly stochastics the week of December 29. After falling to a low of $3.44, a test of technical support at $3.47, the NCI.X has moved sideways. Weekly stochastics remain neutral to bearish hinting at a second test of support at $3.47.

Soybean meal: The May contract closed $14.70 lower at $327.70 last week. The market remains a mix of technical signals. While stochastics continue to indicate a secondary (intermediate-term) uptrend is in place, the May contract fell hard from its recent test of resistance at $351, a price that marks the 50% retracement level of the previous downtrend from $409.60 through the low of $292.30. Still, this past week's sell-off did not see the contract significantly breach technical support at $325.40 or trendline support at $322.80. This would imply that continued bullish fundamentals, indicated by the market's inverted forward curve, could lead to another rally.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom


Commodity trading is very complicated and the risk of loss is substantial. The author does not engage in any commodity trading activity for his own account or for others. The information provided is general, and is NOT a substitute for your own independent business judgment or the advice of a registered Commodity Trading Adviser.

Posted at 8:42AM CST 03/07/15 by Darin Newsom
 
Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $2.85 lower at $59.73. Despite the lower close the secondary (intermediate-term) trend remains up with weekly stochastics bullish. The spot-month contract continues to hold below resistance at $62.22, a price that marks the 23.6% retracement level of the previous downtrend from $117.34 through the low of $45.19. Given the uptrend in the spot futures spread (weakening contango), the longer-term price upside price target remains the 38.2% retracement level of $72.75.

Crude Oil: The spot-month contract closed $0.15 lower at $49.61. The secondary trend remains sideways with the spot-month contract holding below resistance at the 4-week high of $54.24 and above the recent low of $43.58. Weekly stochastics are neutral to bullish, nearing a move above the oversold level of 20%. While the nearby futures spread has seen a weakening contango, it still reflects a bearish view of supply and demand. Also, Friday's CFTC Commitments of Traders report showed noncommercial interests reduced their net-long holdings by 7,548 contracts, putting pressure on the market.

Distillates: The spot-month contract closed 42.99cts lower at $1.8690. While technical signals continue to indicate the secondary (intermediate-term) trend is up, the market readjustment after the expiration of the March futures contract resulted in a test of support at $1.8802. The spot futures spread remains inverted, indicating a bullish supply and demand situation, meaning the spot-month futures contract could once again test resistance between $2.2286 and $2.4261. The previous week's high was $2.3514.

Gasoline: The spot-month contract closed 11.43cts higher at $1.8819. The secondary (intermediate-term) trend remains up. However, the spot-month contract fell back from its test of resistance at $2.0060, a price that marks the 38.2% retracement level of the previous downtrend from $3.2672 through the low of $1.2265. The trend of the spot futures spread is also up (weakening contango), indicating increased support from commercial buying. Friday's weekly CFTC Commitments of Traders report showed noncommercial interests increasing their net-long futures position by 3,575 contracts.

Ethanol: The spot-month contract closed 1.6cts higher at $1.4600. The secondary (intermediate-term) remains sideways as the spot-month contract consolidates between $1.6770 and $1.2920. Weekly stochastics remain neutral to bullish below the oversold level of 20%.

Natural Gas: The spot-month contract closed 10.5cts higher at $2.839. The secondary (intermediate-term) trend may be trying to turn up again, with last week's low of $2.641 forming a potential double-bottom with the previous low of $2.567. Weekly stochastics are also bullish below the oversold level of 20%. Nevertheless, the market has had a difficult time generating continued buying enthusiasm, needing a move above the 4-week high of $3.039 to signal a bullish breakout.

Propane (Conway cash price): Conway propane closed 4.0cts lower at $0.5375. Despite the sell-off seen last week, the secondary (intermediate-term) trend remains up. Initial support is at $0.5159, then $0.4812. These prices mark the 33% and 50% retracement levels of the previous rally from $0.3775 through last week's high of $0.5850.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, March 3.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 7:35AM CST 03/07/15 by Darin Newsom
 

Monday 03/02/15

Cotton: Long-term Bullish Signals

A close look at the monthly chart for cotton shows a number of important technical signals were established at the end of February, all of them bullish. First, the more active May contract moved to a new 4-month high of 66.24, falling just short of taking out the September 2014 high of 68.48. Second, the May was able to close near its monthly high at 64.93 on increased support from noncommercial traders (third study, blue histogram). This group moved from a net-short futures position of 15,572 at the end of January to a net-long futures position of 46,577 contracts to close out February. Commercial traders also provided support, with the carry in the nearby futures spread whittled from 0.66 to 0.20 over the course of the month (bottom study, green line). All of this helped to establish a bullish crossover by monthly stochastics (second study) below the oversold level of 20%, confirming the idea the major (long-term) trend has turned up.

Source: DTN ProphetX

Taking all of this into account the cotton market, over time, should test initial resistance at the 109.90 level. This price marks the 33% retracement of the previous major downtrend from 215.75 (March 2011) through the 57.05 low (January 2015).

However, a look back to 2012 shows that we've seen this setup before. In July 2012 we saw a similar situation, except that noncommercial traders continued to hold a net-short futures position. While this group would go long, up to 78,793 contracts at the end of March 2013, the future market was not able to break through the 100.00 mark, posting a high of 93.93 in March 2013 and 97.35 in March 2014.

The key difference this time could be noncommercial interest. If this group continues to buy it could spark a stronger rally. Keep in mind though that the market's seasonal tendency is to post a high in late February/early March, opening the door for the market to give back some of last month's solid rally.

Still, if this were some anonymous market and I was looking at its monthly chart and structural makeup (long-term trend futures, spreads), the conclusion would be a potentially strong uptrend in the making. We'll see if cotton can live up to this potential.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom

Posted at 8:02AM CST 03/02/15 by Darin Newsom
 

Sunday 03/01/15

Monthly Analysis: Grain Markets

Corn (Futures): The May contract closed at $3.93 1/4, 23 1/4 cents higher on the monthly chart. The major (long-term) trend remains up with initial resistance at the December high of $4.17. A breakout of this level would lead to a test of resistance near $4.43 1/2, a price that marks the 23.6% retracement level of the previous major downtrend from $8.49 (August 2012) through the low of $3.18 1/4 (October 2014). The neutral to bearish carry in the markets forward curve could limit the long-term rally to the 38.2% retracement level of $5.21. The May 2014 high was $5.22 3/4.

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.65, up 21 cents for the month. The major (long-term) trend remains up. Initial resistance is at the December high of $3.80. Beyond that resistance is pegged at $4.90, a price that marks the 38.2% retracement level of the previous major downtrend from $8.26 (August 2012) through the low of $2.81 (October 2014). The April 2014 high was $4.86.

Soybeans (Futures): The May contract closed at $10.31 3/4, 70 3/4 cents higher on the monthly chart. Monthly stochastics remain neutral below the oversold level of 20%, though the rally in the futures market at the end of February established a secondary bullish crossover, a confirming signal of the major (long-term) uptrend indicated at the end of October 2014. Initial resistance is at the November 2014 high of $10.86 1/4. Given the bullish view of supply and demand indicated by the long-term forward curve, the more active contract should be able to extend the major uptrend to $13.46 1/2, a price that marks the 50% retracement level of the previous major downtrend from $17.89 (September 2012) through the October 2014 low of $9.04.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.84, up 72cts for the month. Though monthly stochastics remain neutral below the oversold level of 20%, the major (long-term) trend is up. Initial resistance is at the November high of $10.08, with the long-term target between $11.49 and $12.99. These prices mark the 33% and 50% retracement levels of the previous major downtrend from $17.48 (high from August 2012) through the October 2014 low of $8.50.

SRW Wheat (Futures): The May Chicago contract closed at $5.13, 10 1/4 cents higher on the monthly chart. The major (long-term) trend remains sideways as the more active futures contract continues to hold above its previous low of $4.66 1/4. Resistance is near $6.26 1/2, a price that marks the 33% retracement level of the previous sell-off from $9.47 1/4 (high from July 2012) through $4.66 1/4 low (September 2014).

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.88, up 18 cents for the month. The major (long-term) trend remains sideways with support at $4.25 (low from September 2014) and resistance at $6.23 (high from December 2014).

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom


Commodity trading is very complicated and the risk of loss is substantial. The author does not engage in any commodity trading activity for his own account or for others. The information provided is general, and is NOT a substitute for your own independent business judgment or the advice of a registered Commodity Trading Adviser.

Posted at 8:22AM CST 03/01/15 by Darin Newsom
 
Monthly Analysis: Livestock Markets

Live Cattle: The April contract closed at $151.70, down $5.75 on the monthly chart. The major (long-term) trend remains down following the bearish crossover by monthly stochastics at the end of December. Given the continued bullish view of supply and demand indicated by the strength of the April to June futures spread (see chart), initial support pegged between $141.85 and $137.30, prices that mark the 33% and 38.2% retracement levels of the previous major uptrend from $79.975 (March 2009) through the high of $172.75 (November 2014), should hold the downtrend. Next support is at the 50% retracement level near $126.35.

Source: DTN ProphetX

Feeder Cattle: The March contract closed at $201.90, down $3.30 on the monthly chart. The market extended its major (long-term) downtrend established with the bearish crossover of monthly stochastics at the end of October 2014. The February low of $193.00 was a test of initial support near $192.40, a price that marks the 33% retracement level of the previous major uptrend from $85.50 (December 2008) through the high of $245.75 (October 2014). If the market is able to rally, initial resistance is between $210.55 and $219.375.

Lean Hogs: The April contract closed at $67.475, down $4.775 on the monthly chart. The major (long-term) trend remains down. However, monthly stochastics are in single digits indicating the trend could be in for a change. Similar to crude oil, continued bearish supply and demand, in this case indicated by the sharp downtrend in the April to June futures spread, could keep the market from establishing a major uptrend.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.65, up 21 cents for the month. The major (long-term) trend remains up. Initial resistance is at the December high of $3.80. Beyond that resistance is pegged at $4.90, a price that marks the 38.2% retracement level of the previous major downtrend from $8.26 (August 2012) through the low of $2.81 (October 2014). The April 2014 high was $4.86.

Soybean meal: The March contract closed at $353.70, up $23.80 on the continuous monthly chart. Monthly studies remain a mix of signals with the last major stochastics indicator a bullish crossover from June 2010 indicating the major (long-term) trend is up. However, soybean meal has established a wide ranging sideways trend between $554.20 and $302.00. With the nearby contract near the low end of this range, and the inverted forward curve continuing to indicate bullish fundamentals, the nearby contract could look to rally back to near the mid-point of its sideways range at $428.20.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom

Posted at 7:47AM CST 03/01/15 by Darin Newsom
 
Monthly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed at $62.58, up $9.59 on the monthly chart. As discussed at the end of January, the major (long-term) trend turned up in February. The spot-month contract closed near its monthly high, establishing a bullish crossover by stochastics well below the oversold level of 20%. Initial resistance could be seen at $74.44, the 23.6% retracement level of the previous downtrend from $128.40 through January's low of $45.19. The 38.2% retracement level is up at $84.75.

Source: DTN ProphetX

Crude Oil: The spot-month contract closed at $49.76, up $1.52 on the monthly chart. While the market did see a bullish crossover by monthly stochastics below the oversold level of 20% at the end of February the major (long-term) trend is not up but sideways. The strengthening downtrend in the spot futures spread (strengthening contango/carry) reflects an increasingly bearish supply and demand situation that should limit noncommercial buying interest. Initial resistance is at the January high of $55.11, then $60.39. The latter is the 23.6% retracement level of the previous downtrend from $114.83 through the January low of $43.58.

Distillates: The spot-month contract closed at $1.9737, up 28.74cts on the monthly chart. February's strong rally saw the spot-month contract test initial resistance at $2.1821, a price that marks the 33% retracement level of the previous downtrend from $3.37 through the January low of $1.5890. While the spot-month contract did close well off its monthly high of $2.3514, stochastics established a bullish crossover below the oversold level of 20% indicating the major (long-term) trend has turned up. Given the forward curve remains inverted (bullish supply and demand), the market could look at extending its uptrend to the 50% retracement level of $2.4795 and possibly the 67% level of $2.7769.

Gasoline: The spot-month contract closed at $1.9779, up 56.27cts on the monthly chart. Monthly signals are mixed in RBOB, with stochastics posting a bullish crossover above the oversold level of 20%. This would imply that the market is in a major (long-term) sideways trend, though the spot-month contract closed near its monthly high of $1.9893. Given the inverted forward curve (bullish supply and demand), the major trend has likely turned up with a long-term target of $2.6185. This price marks the 61.8% retracement level of the previous downtrend from $3.4789 through the January low of $1.2265. Initial resistance could be seen at $2.0869 and $2.3527, prices that mark the 38.2% and 50% retracement levels respectively.

Ethanol: The spot-month contract closed at $1.444, up 7.7cts on the monthly chart. While monthly stochastics would indicate the major (long-term) trend remains down, the spot-month contract did consolidate within January's range of $1.665 to $1.292 during February, hinting at a possible move to a sideways trend. This would set the stage for a bullish crossover by stochastics in the coming months, establishing a major uptrend.

Natural Gas: The spot-month contract closed at $2.734, up 4.3cts on the monthly chart. The major (long-term) trend remains down as the spot-month contract posted a new low of $2.567 during February. However, the spot-month contract was able to rally off its low to close higher for the month. While monthly stochastics continue to indicate the major (long-term) trend remains down, the market is nearing a potential change in trend given stochastics are well below the oversold level of 20%.

Propane (Conway cash price): Conway propane closed at $0.4887, up 3.87cts on its monthly chart. The major (long-term) trend appears to have turned sideways with cash propane holding above its December low of $0.4000 during January. With monthly stochastics deep in single digits the market is in position to establish a major uptrend, possibly in February.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom

Posted at 7:04AM CST 03/01/15 by Darin Newsom
 

Saturday 02/21/15

Weekly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.64, down $0.01 for the week. The secondary (intermediate-term) trend remains down with the last signal a bearish crossover by weekly stochastics the week of December 29. After falling to a low of $3.44, a test of technical support at $3.47, the NCI.X has moved sideways. The last two weeks has seen a test of resistance between $3.62 and $3.68, prices that mark the 50% and 67% retracement levels of the initial selloff from $3.80 through the $3.44 low. Weekly stochastics remain neutral to bearish.

Corn (Old-crop): The May contract closed 2.25cts lower at $3.93 last week. Weekly stochastics are bearish, indicating the secondary (intermediate-term) trend remains down. Support is between $3.82 1/4 and $3.72, prices that mark the 50% and 61.8% retracement level of the previous uptrend from $3.39 1/4 through the high of $4.25 1/4. If the contract is able to post a commercial-led rally against its prevailing trend, resistance is pegged between $4.01 3/4 and $4.11.

Corn (New-crop): The December contract closed 1.25cts lower at $4.16 1/4 last week. Weekly stochastics remain bearish indicating the secondary (intermediate-term) trend is down. Given the continued neutral view of new-crop supply and demand indicated by the carry in the December 2015 to March 2016 futures spread, Dec corn could fall back to a test of support at $4.03 1/2. This price marks the 50% retracement level of the previous uptrend from $3.64 1/4 through the high of $4.40.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.55, up 9 cents for the week. Technical indicators show the NSI.X has rejoined its secondary (intermediate-term) uptrend. The NSI.X posted a new 4-week high of $9.63, with the higher weekly close leading to a bullish crossover by stochastics above the oversold level of 20%. The last major signal in stochastics remains the bullish crossover below 20% the week of October 13, 2014. The bearish crossover seen the January 12 occurred below the overbought level of 80%, signaling the move to the sideways trend between $10.02 and $9.12 the NSI.X has been in since. The longer-term target remains $10.66, a price that marks the 33% retracement level of the downtrend from $14.97 through the low of $8.50.

Soybeans (old-crop): The May contract closed 7.50cts higher at $10.02 1/4 last week. May soybeans posted a new 4-week high $10.20 3/4 indicating the secondary (intermediate-term) trend has turned up again. The higher weekly close, though well off its high, led to a bullish crossover by stochastics above the oversold level of 20%. Initial resistance is between $10.48 and $10.65 3/4, prices that mark the 33% and 38.2% retracement levels of the previous downtrend from $12.87 1/4 through the low of $9.28 3/4. The May to July futures spread looks to be establishing an uptrend (weakening carry) reflecting an increasingly bullish commercial outlook. Given this, the May contract could extend its uptrend to the 50% retracement level of $11.08.

Soybeans (new-crop): The November contract closed 9.00cts higher at $9.80 last week. Nov soybeans posted a new 4-week high $9.94 1/4 indicating the secondary (intermediate-term) trend has turned up again. The higher weekly close, though well off the high, was enough to establish a bullish crossover by weekly stochastics above the oversold level of 20%. The last major turn signal by weekly stochastics was a bullish crossover below 20% the week of October 6. The November 2015 to January 2016 futures spread continues to trend sideways at a neutral to bullish level of carry between 4 3/4 cents and 6 1/2 cents. This could support an extension of the secondary uptrend to a test of the 50% retracement level of $10.79 3/4.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.83, down 23 cents for the week. The secondary (intermediate-term) trend has turned sideways. Last week's action saw the SR.X post a bearish outside week, offsetting the bullish key reversal from two weeks ago. Weekly stochastics are below the oversold level of 20%, indicating cash SRW wheat could find renewed buying interest as it nears support at the previous low of $4.66.

SRW Wheat (old-crop): The May Chicago contract closed 22.25cts lower at $5.07 last week. May Chicago wheat posted a bearish outside week, indicating the contract could move toward a test of its low of $4.89 1/4. Weekly stochastics are below the oversold level of 20% meaning downside potential could be limited. The last major turn signal by stochastics was a bullish crossover below the oversold level of 20% the week of September 29, 2014.

SRW Wheat (new-crop): The July Chicago contract closed 20.75cts lower at $5.11 1/2 last week. July Chicago wheat posted a bearish outside week indicating a test of the contract low of $4.96 1/2 is possible in the coming weeks. Stochastics are below the oversold level of 20% indicating downside potential could be limited.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Posted at 10:46AM CST 02/21/15 by Darin Newsom
 
Weekly Analysis: Livestock Markets

Live Cattle: The April contract closed $4.70 lower at $148.525 last week. The secondary (intermediate-term) trend looks to have turned sideways. As discussed last week, April live cattle ran into resistance near $154.05, the 38.2% retracement level of the Wave C sell-off from $166.00 through the low of $146.65. The fact the contract couldn't push to resistance at the 50% level of $156.325 indicates increased pressure from the commercial side of the market, an idea confirmed by the April weakening against the June contract last week. Noncommercial traders continue to add to their short-futures position, with Friday's CFTC Commitments report showing an increase of 3,444 contracts. Weekly stochastics finished last week back below the oversold level of 20%.

Source: DTN ProphetX

Feeder Cattle: The March contract closed $4.675 lower at $199.175 last week. The secondary (intermediate-term) trend remains sideways. Support is at the 4-week low of $193.00, a price that was a test of technical support near $193.90, the 67% retracement level of the previous uptrend from $172.00 through the high of $237.80. Resistance is now pegged at the new 4-week high of $206.40. Weekly stochastics are neutral, just below the oversold level of 20%.

Lean hogs: The April contract closed $1.375 higher at $67.40 last week. The secondary (intermediate-term) trend turned up last week as the contract posted a bullish key reversal. After moving to a new contract low of $63.225, April hogs rallied above the previous week's high of $68.50 before closing higher for the week. This also created a bullish crossover by weekly stochastics below the oversold level of 20%, confirming the pattern seen in the futures market. Given the increasing bearish commercial view indicated by the strong downtrend in the April to June futures spread, solid resistance is expected between $74.70 and $76.40. These prices mark the 33% and 38.2% retracement levels of the previous downtrend from $97.65 through last week's low.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.64, down $0.01 for the week. The secondary (intermediate-term) trend remains down with the last signal a bearish crossover by weekly stochastics the week of December 29. After falling to a low of $3.44, a test of technical support at $3.47, the NCI.X has moved sideways. The last two weeks has seen a test of resistance between $3.62 and $3.68, prices that mark the 50% and 67% retracement levels of the initial selloff from $3.80 through the $3.44 low. Weekly stochastics remain neutral to bearish.

Soybean meal: The May contract closed $12.70 higher at $338.70 last week. The secondary (intermediate-term) trend turned up as the futures contract posted a new 4-week high of $342.50 and weekly stochastics turned bullish again. Initial resistance could be seen near $351.00, a price that marks the 50% retracement level of the previous downtrend from $409.60 through the low of $292.30. However, the strong uptrend (strengthening inverse) in the May to July futures spread reflects an increasingly bullish commercial view of supply and demand. This could lead to a test of resistance between $364.80 and $370.50, the 61.8% and 67% retracement levels, if not a full retracement back to the $409.60 high.

To track my thoughts on the markets throughout the day, follow me on Twitter:www.twitter.com\Darin Newsom


Commodity trading is very complicated and the risk of loss is substantial. The author does not engage in any commodity trading activity for his own account or for others. The information provided is general, and is NOT a substitute for your own independent business judgment or the advice of a registered Commodity Trading Adviser.

Posted at 9:20AM CST 02/21/15 by Darin Newsom
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