Technically Speaking
Darin Newsom DTN Senior Analyst

Saturday 10/25/14

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $0.03 lower. The secondary (intermediate-term) trend may have turned sideways last week, with the range now set by the previous week's high of $90.18 and low of $82.60. Major (long-term) support remains at $82.30, a price that marks the 50% retracement level of the previous uptrend from $36.20 through the high of $128.40.

Crude Oil: The spot-month contract closed $1.74 lower. The secondary (intermediate-term) trend remains down with the spot-month contract near its recent low of $79.78. Major (long-term) support remains at $76.33 while monthly stochastics are still bearish.

Distillates: The spot-month contract closed 1.57cts lower. The secondary (intermediate-term) remains, though the spot-month contract held within the previous week's trading range of $2.5616 and $2.4208. Major (long-term) support is at $2.4878 (Friday's close by the spot-month was $2.4819), with next support pegged at $2.2276.

Gasoline: The spot-month contract closed 2.48cts lower. The secondary (intermediate-term) trend looks to have turned sideways, with the spot-month contract holding within the previous week's trading range of $2.2685 and $2.1347. Major (long-term) support remains at $2.1319, a price that marks the 50% retracement level of the uptrend from $0.7850 (December 2008 low) through the high of $3.4789 (April 2011 high).

Natural Gas: The spot-month contract closed 14.3cts lower. As expected, the secondary (intermediate-term) trend turned down last week. The spot-month contract moved through support at the previous low of $3.723, posting a new low of $3.558. Major (long-term) support is between $3.656 and $3.431.

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

Posted at 7:44AM CDT 10/25/14 by Darin Newsom
 

Monday 10/20/14

Weekly Analysis: Livestock Markets

Live Cattle: The December contract closed $0.25 lower last week. Technically, the December contract continues to indicate it has established a top, possibly a 5-point top, implying the secondary (intermediate-term) trend has turned down. However, due to the ongoing bullish commercial outlook indicated by the December to February futures spread, the market could once ignore bearish technical signals. Market volatility remains high, roughly 14.5%, while Friday's CFTC Commitments of Traders report showed noncommercial interests trimming their net-long futures holdings by 218 contracts.

Feeder Cattle: The November contract closed $5.05 lower last week. The market continues to indicate the secondary (intermediate-term) trend has turned down. If so the previous week's high of $245.75 could be considered the fifth point in a possible 5-point top. The previous week also saw the November contract's weekly stochastics establish a bearish crossover well above the overbought level of 80%.

Lean hogs: The December contract closed $3.825 lower last week, with the posted low of $89.35 a test of support pegged near $89.20. This price marks the 67% retracement level of the rally from $84.275 (low the week of August 18) through $99.00 (high the week of September 8). Resistance remains near $98.45, the 67% retracement of the previous downtrend from $105.50 (high the week of July 14) through the $84.275 low.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.06, up 13 cents for the week. The intermediate-term trend on the weekly chart is up, in step with the market's seasonal index through October. Last week's higher close established a secondary bullish crossover by weekly stochastics. The initial bullish crossover occurred the week of August 11. However, given the strengthening carry in futures spreads, look for basis to weaken meaning the cash market should continue to lose ground to the rally in the futures market.

Soybean meal: The December contract closed $19.50 higher last week. After weekly stochastics established a bullish crossover the previous week, the December contract extended its secondary (intermediate-term) uptrend to a test of resistance between $333.80 and $339.50 last week. These prices mark the 33% and 38.2% retracement levels of the previous downtrend from $411.40 through the recent low of $295.10. Given the strong uptrend (strengthening inverse) in the December to January futures spread, the December contract could soon test the 50% retracement level of $353.50.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, October 14.

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 5:04AM CDT 10/20/14 by Darin Newsom
 

Sunday 10/19/14

Weekly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.06, up 13 cents for the week. The intermediate-term trend on the weekly chart is up, in step with the market's seasonal index through October. Last week's higher close established a secondary bullish crossover by weekly stochastics. The initial bullish crossover occurred the week of August 11. However, given the strengthening carry in futures spreads, look for basis to weaken meaning the cash market should continue to lose ground to the rally in the futures market.

Corn (Futures): The December contract closed 14.00cts higher. The secondary (intermediate-term) trend remains up, in line with the market's seasonal index through October. With the carry in the December to March futures spread strengthening, the secondary uptrend could be limited to between $3.65 and $3.84. These pries mark the 23.6% and 33% retracement levels of the previous downtrend from $5.17 through the recent low of $3.18 1/4. Support continues to come from noncommercial buying, with Friday's CFTC report showing this group increasing their net-long futures position by 17,254 contracts due to short-covering of 29,351 contracts.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.92, up 29 cents for the week. The higher close led to weekly stochastics posting a secondary bullish crossover, the initial occurring the week of August 18, indicating the intermediate-term trend has turned up. Seasonally, both the 5-year and 10-year indexes show the cash market tends to trend up through October, with the 5-year then showing a downturn through late November. Initial support could come from the commercial side of the market, with soybean future's forward curve still indicating a neutral long-term outlook. National average basis was unchanged for the week at 60 cents under the November futures contract.

Soybeans (Futures): The November contract closed 29.25cts higher. The secondary (intermediate-term) trend remains up, with support coming from noncommercial traders. This group reduced their net-short futures position by 9,083 contracts by adding to their long futures potion by 11,799 contracts. On the other hand, this means they also added 2,716 contracts of short futures. The market's forward curve (series of futures spreads) remains neutral, with the November to July carry covering approximately 54% of full cost of carry (total cost to hold beans in commercial storage). Technically this could allow the November contract to extend its rally to between $10.28 and $10.47, though resistance might be seen near $9.92 1/2.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.74, up 20 cents for the week. The secondary (intermediate-term) remains up, in line with the market's 5-year seasonal index that shows the cash market tends to rally through the first weekly close in November. Resistance is pegged near $5.20, a price that marks the 33% retracement level of the previous downtrend from $7.11 through the low of $4.25. However, the cash market could find possible selling at the 23.6% retracement level near $4.93. Friday's national average basis was calculated at 42 cents under the December futures contract, 2 cents stronger for the week.

SRW Wheat (Futures): The December Chicago contract closed 17.50cts higher. The secondary (intermediate-term) trend remains up, in line with the market's 5-year seasonal index that shows a tendency to rally through the end of October. Initial resistance is pegged at $5.65 3/4, a price that marks the 33% retracement level of the previous downtrend from $7.65 through the low of $4.66 1/4. Recent weeks have seen a strong uptrend, weakening carry, in the December to March futures spread indicating a less bearish commercial outlook. However, given last week's slight downturn in this trend, this spread will need to be watched closely in the coming weeks. Additional support continues to come from the noncommercial side of the market, with last Friday's CFTC Commitments of Traders report showing this group reducing their net-short futures position by 6,582 contracts. The bulk of this came from short-covering of 6,356 contracts.

Last Friday's CFTC Commitments of Traders report showed positions as of Tuesday, October 14.

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

Posted at 8:33AM CDT 10/19/14 by Darin Newsom
 

Saturday 10/18/14

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $4.05 lower. The secondary (intermediate-term) trend remains down after the spot-month contract posted a new low of $82.60 last week. However, the spot-month was able to rally off this low to close at $86.16. Major (long-term) support remains at $82.30, the 50% retracement level of the uptrend from $36.20 through the high of $128.40.

Crude Oil: The spot-month contract closed $3.97 lower. Last week saw the spot-month contract post a new low of $79.78, extending the secondary (intermediate-term) downtrend. Next major (long-term) level of support is $76.33. Monthly stochastics remain bearish.

Distillates: The spot-month contract closed 6.26cts lower. The secondary (intermediate-term) trend remains down after the spot-month contracts posted a new low of $2.4208 last week. While monthly stochastics have moved below the oversold level of 20%, next major (long-term) support is down at $2.2276.

Gasoline: The spot-month contract closed 2.48cts lower. The secondary (intermediate-term) trend is down, with the spot-month contract posting a new low of $2.1347 last week. This was a test of major (long-term) support at $2.1319, a price that marks the 50% retracement level of the uptrend from $0.7850 (December 2008 low) through the high of $3.4789 (April 2011 high). Monthly stochastics remain bearish.

Natural Gas: The spot-month contract closed 9.3cts lower. The secondary (intermediate-term) trend has turned sideways and is threatening a downside breakout. The spot-month contract moved through support at the previous low of $3.723 last week before rallying late Friday. This sets the stage for a test of major (long-term) support between $3.656 and $3.431.

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

Posted at 10:14AM CDT 10/18/14 by Darin Newsom
 

Monday 10/13/14

Weekly Analysis: Livestock Markets

Live Cattle: The December contract closed $0.575 lower last week. From a technical point of view, last week's move to a new high of $169.60 followed by a lower weekly close would suggest a move to a secondary (intermediate-term) downtrend. However, the live cattle market as shrugged off bearish technical signals before during its major (long-term) uptrend. Regardless, the last important signal in weekly stochastics was a bearish crossover. Market volatility remains high, possibly leading to continued liquidation of the noncommercial long futures position. Fundamentally the market remains bullish.

Feeder Cattle: The November contract closed $1.775 lower last week. Similar to live cattle, last week's move to a new high ($245.75) followed by a lower weekly close would suggest a possible move to a secondary (intermediate-term) downtrend. However, as like live cattle, the feeder market has ignored bearish technical signals in the past due to continued bullish fundamentals. Still, if last week was a turn it would once again suggest the possible establishment of a five-point top.

Lean hogs: The December contract closed $1.375 higher last week. The minor (short-term) trend is sideways, with support near $91.65 then $89.175. The secondary (intermediate-term) trend remains down with resistance at $98.45.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.93, up 9 cents for the week. While the secondary (intermediate-term) and major (long-term) trends remain down, the cash market's 5-year and 10-year seasonal indexes show a tendency to move higher through the end of the month. National average basis (versus the September 2015 futures contract) of 79 cents was 2 cents weaker from the previous Friday's calculation.

Soybean meal: The December contract closed $12.20 higher last week. The strong rally by the December contract last week established a bullish crossover by weekly stochastics, indicating the secondary (intermediate-term) trend has turned up. If the market can build bullish momentum, the initial upside target is $339.50. This price marks the 38.2% retracement level of the previous downtrend from $411.40 through the recent low of $295.10.

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 8:05AM CDT 10/13/14 by Darin Newsom
 

Sunday 10/12/14

Weekly Analysis: Grain Markets

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.93, up 9 cents for the week. While the secondary (intermediate-term) and major (long-term) trends remain down, the cash market's 5-year and 10-year seasonal indexes show a tendency to move higher through the end of the month. National average basis (versus the September 2015 futures contract) of 79 cents was 2 cents weaker from the previous Friday's calculation.

Corn (Futures): The December contract closed 10.75cts higher. Technical indicators show the secondary (intermediate-term) trend is up, in line with the market's 5-year and 10-year seasonal indexes. In initial resistance is pegged near $3.84 1/2, a price that marks the 33% retracement level of the previous downtrend from $5.17 through the recent low of $3.18 1/4.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.63, up 12 cents for the week. While the secondary (intermediate-term) and major (long-term) trends remain down, stochastics for both (weekly, monthly respectively) show the cash market to be sharply oversold and nearing a bullish crossover. Seasonally, both the 5-year and 10-year indexes show the cash market tends to rally through the end of October. National average basis strengthened by 2 cents last week, calculated last Friday at 60 cents under the November contract.

Soybeans (Futures): The November contract closed 10.25cts higher. Weekly stochastics established a bullish crossover last week, hinting at a possible move to a secondary (intermediate-term) uptrend. However, the November contract failed to close a bearish gap between $9.54 3/4 and $9.56, posting a high of $9.55 before falling back late in the week. This could move the contract into a sideways trend with support at the recent low of $9.04.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.54, up 16 cents for the week. The secondary (intermediate-term) is up, in line with the market's 5-year seasonal index. If the cash market can build bullish momentum its initial upside target remains near $5.20.

SRW Wheat (Futures): The December Chicago contract closed 12.75cts higher. Last week's higher close extended the recently established secondary (intermediate-term) uptrend, a move that is in line with its 5-year seasonal index. The initial upside target is at $5.65 3/4, a price that marks the 33% retracement level of the previous downtrend from $7.65 through the recent low of $4.66 1/4.

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

Posted at 4:36PM CDT 10/12/14 by Darin Newsom
 

Saturday 10/11/14

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $2.10 lower. The secondary (intermediate-term) trend remains down after the spot-month contract posted a new low of $88.11 last week. However, the spot-month was able to rally off this low to close at $90.21. Next major support is at the 50% retracement level of $82.30. Weekly stochastics remain in an oversold situation while monthly stochastics are bearish.

Crude Oil: The spot-month contract closed $3.92 lower. Last week saw the spot-month contract post a new low of $83.59, following through on the previous week's bearish outside range and extending the secondary (intermediate-term) downtrend. The next major (long-term) level of support is $76.33. Monthly stochastics remain bearish.

Distillates: The spot-month contract closed 5.61cts lower. The secondary (intermediate-term) trend remains down after the spot-month contracts posted a new low of $2.5035 last week. While monthly stochastics have moved below the oversold level of 20%, next major (long-term) support is down at $2.2840.

Gasoline: The spot-month contract closed 12.10cts lower. The secondary (intermediate-term) trend is down, with the spot-month contract posting a new low of $2.2267 last week. The next level of major (long-term) support is at $2.1319, a price that marks the 50% retracement level of the uptrend from $0.7850 (December 2008 low) through the high of $3.4789 (April 2011 high).

Natural Gas: The spot-month contract closed 18.0cts lower. While technical indicators continue to show the secondary (intermediate-term) trend is up, action in the spot-month contract is pointing to a continued sideways trend. Resistance is at $4.167, a price that marks the 38.2% retracement level of the sell-off from $4.886 through the low of $3.723. Support remains at the previous low ($3.723). Major (long-term) stochastics remain bearish.

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

Posted at 8:19AM CDT 10/11/14 by Darin Newsom
 

Monday 10/06/14

Weekly Analysis: Livestock Markets

Source: DTN ProphetX

Live Cattle: The December contract closed $3.775 higher last week. The secondary (intermediate-term) trend remains up as the contract posted a new high of $167.675. Weekly stochastics continue to show the market is overbought, but this situation has been in effect for the most part of the last year. The pattern on the weekly chart continues to show a possible 5-point top, though how high the contract could extend its rally, driven by continued commercial buying, is unknown.

Feeder Cattle: The November contract closed $9.375 higher last week. The secondary (intermediate-term) trend remains up, with the November contract posting a new high of $242.475 last week. Strong support at the end of last week could lead to follow-through buying this coming week. The contract still looks to be in the process of establishing a 5-point top as trade volume continues to increase.

Lean hogs: The December contract closed $1.45 lower last week. The minor (short-term) trend is sideways, with support near $91.65 then $89.175. The secondary (intermediate-term) trend remains down with resistance at $98.45.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.84, down 5 cents for the week. While the secondary (intermediate-term) and major (long-term) trends remain down, the cash market's 5-year and 10-year seasonal indexes show the low close for the marketing year tend to occur with last Friday's settlement. National average basis (versus the September 2015 futures contract) of 77 cents under is below the 5-year low for last week of 68 cents under, and near the weakest basis for any week over the last 5-years of 82 cents under.

Soybean meal: The December contract closed $2.30 lower last week. The secondary (intermediate-term) trend remains down. Major (long-term) support is at $274.80, the low from December 2011. Fundamentally the market remains bullish with the forward curve (series of futures spreads) from October 2014 through March 2015 still inverted. However, this price relationship continues to weaken.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, September 30.

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 7:27AM CDT 10/06/14 by Darin Newsom
 

Sunday 10/05/14

Weekly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.84, down 5 cents for the week. While the secondary (intermediate-term) and major (long-term) trends remain down, the cash market's 5-year and 10-year seasonal indexes show the low close for the marketing year tend to occur with last Friday's settlement. National average basis (versus the September 2015 futures contract) of 77 cents under is below the 5-year low for last week of 68 cents under, and near the weakest basis for any week over the last 5-years of 82 cents under.

Corn (Futures): The December contract closed 0.25ct higher. While technical indicators show the secondary (intermediate-term) trend remains down, the December contract could stabilize ahead of Friday's October round of USDA reports. Weekly stochastics remain bearish but deep in single-digits indicating a sharply oversold situation. Meanwhile, last Friday's CFTC Commitments of Traders report showed noncommercial interests adding to their net-long futures position. Seasonally the market tends to post a low the first weekly close of October (last Friday) before rallying roughly 6% through the last weekly close of the month. If realized this year, the December would be near $3.42 at month's end.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.50, down 9 cents for the week. While the secondary (intermediate-term) and major (long-term) trends remain down, stochastics for both (weekly, monthly respectively) show the cash market to be sharply oversold. Seasonally, both the 5-year and 10-year indexes show the cash market tends to post a low with last week's settlement. The NSI.X tends to rally 5% through October's final weekly close, putting a possible price target near $8.92. However, national average basis continues to weaken, with last Friday's calculated 62 cents under (the November contract) below the 50-year average of 57 cents under.

Soybeans (Futures): The November contract closed 2.00cts higher. Despite the higher close the secondary (intermediate-term) trend remains down. Weekly stochastics deep in the single digits continue to indicate the market is sharply oversold. The carry in the November to January futures spread closed at 8 1/4 cents, reflecting light support from the commercial side of the market last week. Seasonally the futures market tends to post a low with the firs weekly close of October (last Friday) before rallying 4% through the end of the month. If realized this year, the November could post a close the last Friday of October near $9.50.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.38, up 12 1/2 cents for the week. The secondary (intermediate-term) trend looks to have turned up with the establishment of a confirming bullish crossover below the oversold level of 20% by weekly stochastics. The initial bullish crossover was posted the week of July 29, 2014. If the cash market can build bullish momentum its initial upside target is near $5.20.

SRW Wheat (Futures): The December Chicago contract closed 11.50cts higher. Last week's higher close led to a bullish crossover by weekly stochastics, below the oversold level of 20%. This combination indicates the secondary (intermediate-term) trend could now be viewed as up. If so, noncommercial traders may have to show more buying interests. Last Friday's CFTC Commitments of Traders report showed this group reducing their net-short futures position by 3,469 contracts, due to an increase in longs of 6,621 contracts offsetting an increase in shorts of 3,152 contracts.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, September 30.

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

Posted at 11:19AM CDT 10/05/14 by Darin Newsom
 

Saturday 10/04/14

Weekly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed $4.69 lower. The spot-month contract posted a new low of $92.31 last week, extending the secondary (intermediate-term) downtrend. This is below major (long-term) support at $93.18, a price that marks the 38.2% retracement level of the previous uptrend from $36.20 through the high of $128.40. Next major support is at the 50% retracement level of $82.30.

Source:DTN ProphetX

Crude Oil: The spot-month contract closed $3.80 lower. Last week saw the spot-month contract establish a bearish outside week, indicating the market has reestablished its secondary (intermediate-term) downtrend. A new low of $88.18 was posted before closing at $89.74. Major (long-term) support is at $89.88, a price that marks the 50% retracement level of the range from $147.27 (July 2008 high) to $32.48 (December 2008 low).

Distillates: The spot-month contract closed 8.42cts lower. The secondary (intermediate-term) trend remains down. After rallying early in the week, the spot-month contract moved to a new low of $2.5945 before closing at $2.6163. Major (long-term) support is at $2.6418, a price that marks the 50% level of the trading range from $4.1586 (July 2008 high) to $1.1252 (March 2009 low).

Gasoline: The spot-month contract closed 28.34cts lower. The secondary (intermediate-term) trend is down. The spot-month contract posted a new low of $2.3505 before closing at $2.3785. Major (long-term) support was at $2.4498, a price that marks the 38.2% retracement level of the uptrend from $0.7850 (December 2008 low) through the high of $3.4789 (April 2011 high). The 50% retracement level is down at $2.1319.

Natural Gas: The spot-month contract closed 5.5cts higher. The secondary (intermediate-term) trend is up after the spot-month contract set a new four-week high of $4.184, also taking out the previous peak of $4.101. Weekly stochastics established a bullish crossover below the oversold level of 20% the week of September 22. Minor resistance is at $4.167, then $4.305. These prices mark the 38.2% and 50% retracement levels of the sell-off from $4.886 through the low of $3.723.

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

Posted at 8:48AM CDT 10/04/14 by Darin Newsom
 

Thursday 10/02/14

Monthly Analysis: Livestock Markets

Live Cattle: The December contract closed at $163.475, up $12.05 for the month. The major (long-term) trend remains up as the December contract established a new high of $165.075 in September. Monthly stochastics remain above the overbought level of 80%, but have for the majority of months since September 2010.

Source: DTN ProphetX

Feeder Cattle: The October contract closed at $235.425, up $18.70 for the month. The major (long-term) trend remains up as the October contract moved to a new all-time high of $236.175 in September. Monthly stochastics are well above the overbought level of 80% but showing no signs of slowing buying interest.

Lean hogs: The December contract closed at $94.25, down $3.60 for the month. The major (long-term) trend is down with support pegged between $92.30 and $82.925. However, the market's long-term 3 to 4 year 6-point cycle chart shows the point-2 low (monthly close) may have occurred this past August. The normal timeframe for a point-2 low is between August and October (for more information, see the Technically Speaking blog post from July 9).

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.84, down 55 cents for the month. This is the lowest weekly close since the $2.27 posted at the end of September 2006. It is possible that the NCI.X could find support at the December 2008 low of $2.6890. Monthly stochastics are well below the 20% level, indicating the cash market is sharply oversold. It is possible the NCI.X could see a secondary bullish crossover in the coming months, confirming the initial pattern from February 2014.

Soybean meal: The nearby contract closed at $304.60, down $134.90 for the month. The major (long-term) trend remains down, with next support pegged near $274.80. This price marks the low from December 2011. Monthly stochastics remain above the oversold level of 20%, indicating the market could see continued pressure.

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

Posted at 7:17AM CDT 10/02/14 by Darin Newsom
 

Wednesday 10/01/14

Monthly Analysis: Energy Markets

Brent Crude Oil: The spot-month contract closed at $94.67, down $8.52 for the month. The major (long-term) trend remains down with next support at $93.18. This price marks the 38.2% retracement level of the previous uptrend from $36.20 (low from December 2008) through $128.40 (high from March 2012). Monthly stochastics are nearing the oversold level of 20%.

Source: DTN ProphetX

Crude Oil: The spot-month contract closed at $91.16, down $4.80 for the month. The major (long-term) trend remains sideways to down with support pegged at $89.88. Monthly stochastics are nearing the oversold level of 20%.

Distillates: The spot-month contract closed at $2.6505, down 20.97cts for the month. The major (long-term) trend remains sideways with support near $2.6420. Monthly stochastics are below the oversold level of 20% and could eventually establish a bullish crossover.

Gasoline: The spot-month contract closed at $2.4373, down 19.58cts for the month. The major (long-term) trend remains sideways with next support pegged at $2.4498. Monthly stochastics are holding above the oversold level of 20%, helping to maintain the market's sideways trend.

Natural Gas: The spot-month contract closed at $4.121, up 5.6cts for the month. The major (long-term) trend remains sideways as the spot-month contract extends its rally off its test of support at $3.656. This price marks the 61.8% retracement level of the previous uptrend from $1.902 through the high of $6.493. The last major signal established by monthly stochastics was a bullish crossover at the end of May 2012. The rally and subsequent interim peak did not create a bearish crossover above the overbought level of 80%.

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

Posted at 12:54PM CDT 10/01/14 by Darin Newsom
 

Tuesday 09/30/14

Monthly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.84, down 55 cents for the month. This is the lowest weekly close since the $2.27 posted at the end of September 2006. It is possible that the NCI.X could find support at the December 2008 low of $2.6890. Monthly stochastics are well below the 20% level, indicating the cash market is sharply oversold. It is possible the NCI.X could see a secondary bullish crossover in the coming months, confirming the initial pattern from February 2014.

Corn (Futures): The December contract closed at $3.20 3/4, 38.25ts lower for the month. The major (long-term) trend remains down with next support between the September 2009 low of $2.96 3/4 and the December 2008 low of $2.90. Monthly stochastics are well below the oversold level of 20%, with the last major signal a bullish crossover from back in March 2014. If the nearby contract stabilizes in October, monthly stochastics could establish a secondary (confirming) bullish crossover by the end of the month.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.57, down $3.23 for the month. The major (long-term) trend remains down. This is the lowest monthly close for the NSI.X since $8.30 from November 2009. Next support could be between $7.77 and $7.31, the lows from October 2008 and December 2008 respectively. Monthly stochastics have not moved below the oversold level of 20% yet, meaning more downside is possible for cash soybeans.

Soybeans (Futures): The November contract closed at $9.13 1/4, $1.11 lower for the month. The major (long-term) trend remains down, with the November contract closing below technical support near $9.28 1/4. This price marks the 67% retracement level of the previous major uptrend from $4.98 1/2 (February 2005 low) through $17.89 (September 2012 high). Monthly stochastics have moved below the oversold level of 20%, but remain months away (seemingly) from establishing a possible bullish crossover.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.28, down $0.87 for the month. The major (long-term trend remains down. The SR.X clearly broke support near $5.12 3/4, a price that marks the 67% retracement level of the previous major uptrend $3.12 (low from December 2008) through $9.14 (high from July 2012). Next support is at the previous low. Monthly stochastics are below the oversold level of 20%, though it could take months before a bullish crossover is seen.

SRW Wheat (Futures): The December Chicago contract closed at $4.77 3/4, 85.75cts lower for the month. The major (long-term) trend is down with next support at the June 2010 low of $4.25 1/2. Monthly stochastics moved below the oversold level of 20%, meaning there could be plenty of time for the market to move lower before any bullish signals are established.

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 6:32PM CDT 09/30/14 by Darin Newsom
Comments (5)
Why was there not much of a reaction to the lowest soybean number in modern history? I call there farmer inventory of corn phantom corn no way is that stored before harvest. Seems like a thief attitude toward farmer owned grain why is that?
Posted by andrew mohlman at 6:48AM CDT 10/01/14
The soybean market doesn't haven't to react to the low soybean number because it is old news - old-crop ending stocks. Traders are looking ahead to what is expected to be a record large new-crop projected to rebuild stockpiles. Had this number come out in July, we might be talking about a vastly different cash soybean market this morning. For more information, see my report review "And Then There Was None". Thanks for your comments.
Posted by DARIN NEWSOM at 7:15AM CDT 10/01/14
With boots firmly on the ground I can tell you this crop will not meet expectations. OLD news had this number came out in july sounds like double talk hard to market grain with double talking people that work it all there way.Actual conditions do not seem to matter.Marketers have a lot of room for huge profits on the backs of farmers they are a lot of dead weight.
Posted by andrew mohlman at 8:29AM CDT 10/01/14
Keep in mind that I have long stated the soybean stocks didn't exist. DTN is one of the few media sites where you will get an opinion questioning USDA's use of negative residual use.
Posted by DARIN NEWSOM at 8:47AM CDT 10/01/14
Yes I recall reading that thanks for responding held beans earlier this summer got good price but felt I should have got more.
Posted by andrew mohlman at 9:07PM CDT 10/01/14
 

Monday 09/29/14

Livestock Markets: Weekly Analysis

Source: DTN ProphetX

Live Cattle: The December contract closed $3.40 higher last week. Despite last week's higher close, the possible 5-point top formation remains in place. However, the December contract closed at its weekly high of $162.10 indicating buying early this coming week could lead to a test of the recent high (point 5 high) of $163.875. Market volatility remains high (14.2%), a factor that could spark another round of noncommercial long-liquidation. Friday's CFTC report showed this group reducing their net-long holdings by 4,517 contracts from last week's report to 91,388 contracts.

Feeder Cattle: The November contract closed $5.275 higher last week. The secondary (intermediate-term) trend remains up, with the November contract posting a new high of $231.60 last week, also the weekly close. Strong support at the end of last week could lead to follow-through buying this coming week. The contract still looks to be in the process of establishing a 5-point top as trade volume continues to increase.

Lean hogs: The December contract closed $0.375 lower last week. The minor (short-term) trend is sideways, with support near $91.40 and resistance at $98.45. The secondary (intermediate-term) trend remains down with resistance at that same $98.45 level. Recent buying interest from the commercial side of the market, as indicated by the uptrend in the December to February futures spread, has allowed the December contract to rally off the low of $84.275.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.89, down 13 cents for the week. This is the lowest weekly close since the $2.8251 posted the week of August 31, 2009. Beyond that is the $2.6890 from the week of December 1, 2008. National average basis continues to trend down, weakening another 5 cents to 34 cents under the December futures contract. The NCI.X is also 70 cents under the September 2015 contract, the weakest it has been at this point in the marketing year compared to the previous 5-years.

Soybean meal: The October contract closed $16.90 lower last week. The secondary (intermediate-term) trend remains down. Major (long-term) support is at $274.80, the low from December 2011. Fundamentally the market remains bullish with the forward curve (series of futures spreads) from October 2014 through March 2015 still inverted. However, this price relationship continues to weaken.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, September 23.

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 6:22AM CDT 09/29/14 by Darin Newsom
 

Sunday 09/28/14

Grain Markets: Weekly Analysis

Source: DTN

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.89, down 13 cents for the week. This is the lowest weekly close since the $2.8251 posted the week of August 31, 2009. Beyond that is the $2.6890 from the week of December 1, 2008. National average basis continues to trend down, weakening another 5 cents to 34 cents under the December futures contract. The NCI.X is also 70 cents under the September 2015 contract, the weakest it has been at this point in the marketing year compared to the previous 5-years.

Corn (Futures): The December contract closed 8.50cts lower. The secondary (intermediate-term) remains down with the weekly close of $3.23 putting the December contract in the lower 3% of the market's 5-year price distribution range (weekly close only). The sideways trend in the December to March futures spread (closing at a 12 3/4 cent carry) continues to cover a bearish 72% of total cost of carry (total cost of holding grain in commercial storage). Next major (long-term) support is pegged at the September 2009 low of $2.96 3/4, then the December 2008 low of $2.90.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.60, down $0.95 for the week. This is the lowest weekly close for the NSI.X since $8.4335 the week of September 28, 2009. National average basis (NSI.X - November futures contract) continues to collapse, falling to 51 cents under at Friday's close, or 49 cents weaker for the week. Seasonally the NSI.X establishes a low the first weekly close of October (next week).

Soybeans (Futures): The November contract closed 46.75cts lower. The secondary (intermediate-term) trend remains down with the November contract closing ($9.10 1/4) near its new low of $9.09 3/4. While weekly stochastics are well below the 20% level, indicating futures to be sharply oversold (the November closed in the lower percentages of the 5-year price distribution range), pressure continues to come from both commercial and noncommercial traders. The November to January futures spread closed at a carry of 8 1/2 cents, roughly 57% of total cost of carry (total cost of holding grain in commercial storage). While larger than previous weeks, this continues to reflect a neutral view of short-term supply and demand.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.25, down 3 cents for the week. The SR.X looks to be stabilizing as it approaches its seasonal low with the close the first week of October (next week). The close of $4.25 is the lowest weekly settlement for the SR.X since $4.2366 the week of June 21, 2010. National average basis continues to weaken with Friday's SR.X losing 2 cents to the December futures contract for the week.

SRW Wheat (Futures): The December Chicago contract closed 0.25ct lower. While the secondary (intermediate-term) trend remains down, the December contract looks to be stabilizing. Weekly stochastics are bearish, well below the oversold level of 20%, in position for an eventual bullish crossover. However, last week's low of $4.66 1/4 is still well above price support at $4.25 1/2, the low from June 2010.

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

Posted at 10:33AM CDT 09/28/14 by Darin Newsom
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