Technically Speaking
Darin Newsom DTN Senior Analyst

Saturday 10/12/13

Ag Markets: Weekly Analysis

Corn: The December contract closed 10.00cts lower. The secondary (intermediate-term) trend remains down on the weekly chart. The Dec contract moved to a new low of $4.32 1/2, settling only 1/2 cent off this price. Weekly stochastics show the contract in an oversold situation below 20% and in single digits. This sets the stage for a possible bullish crossover, indicating a change in trend, in the near future.

Soybeans: The November contract closed 28.25cts lower. The secondary (intermediate-term) trend on the weekly chart remains sideways to down. The November contract is testing support near $12.56 3/4, a price that marks the 61.8% retracement level of the uptrend from $11.62 1/2 through the high of $14.09 1/2. Weekly stochastics remain neutral while market volatility is high at approximately 21.9%.

Wheat: The Chicago December contract closed 5.25cts higher. The secondary (intermediate-term) trend is up. Initial resistance is pegged near $7.28, a price that marks the 33% retracement level of the previous downtrend from $9.13 through the low of $6.35 1/2. Weekly stochastics are bullish and moving toward the overbought level of 80%.

Cotton: The December contract closed 3.81cts lower. The secondary (intermediate-term) trend remains down. The December contract is moving toward support at 82.21, a price that marks the 50% retracement level of the previous uptrend from 70.70 through the high of 93.72. This support also represents a double-bottom formation creating the potential for a larger sell-off, particularly with the strengthening downtrend in the Dec/Mar futures spread indicating a more bearish commercial outlook. Weekly stochastics are nearing the oversold level of 20%.

Live Cattle: The December contract closed 0.05cts higher. The secondary (intermediate-term) trend remains up, though nearing a top. Weekly stochastics are above 90%, showing the Dec contract to be sharply overbought as it tests technical price resistance near $132.60. This price marks the 67% retracement level of the previous downtrend from $137.50 through the low of $122.775. Given the neutral commercial outlook indicated by the Dec/Feb futures spread, the market could soon see increased noncommercial selling. If the secondary trend turns down, initial support is pegged near $129.50.

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Posted at 8:21AM CDT 10/12/13 by Darin Newsom
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