Technically Speaking
Darin Newsom DTN Senior Analyst

Wednesday 01/01/14

Ag Markets: Monthly Analysis

Corn: The spot-month contract closed 6.75cts higher. Despite the higher close for the month, the major (long-term) trend remains down. Monthly stochastics are in an oversold position below 20 percent, indicating that a move to an uptrend is possible in the coming months. Support is now at the December 2013 low of $4.10. The DTN National Corn Index (national average cash price) was down 42% for the year.

Soybeans: The spot-month contract closed 44.00cts lower. The major (long-term) trend remains up. The futures market continues to be driven by the bullish key reversal established in August and the secondary bullish outside month posted in November. Monthly stochastics remain bullish despite the sell-off in December. Initial resistance remains near $13.71, a price that marks the 38.2% retracement level of the previous downtrend from $17.89 (September 2012) through the August 2013 low of $11.62 1/2. However, given the continued inverted forward curve the futures market should see a test of the 50% retracement level of $14.75 3/4. The DTN National Soybean Index (national average cash price) was down 9% for the year.

Wheat: The spot-month Chicago contract closed 49.75cts lower. The wheat market remains in a strong major (long-term) downtrend despite monthly stochastics indicating a sharply oversold situation. The nearby futures contract moved to price levels not seen since May 2012 in December 2013. The DTN National SRW Index (national average cash price) was down 23% for the year.

Cotton: The spot-month contract closed 6.50cts higher. The major (long-term) trend is sideways to up. Technical support is at the low of 66.10 (June 2012) with the high-side of the range near 93.90. Longer-term resistance is up at 119.20, a price that marks the 33% retracement level of the previous downtrend from the high of 227.00 (March 2011) through the June 2012 low of 66.10. For the year, the nearby futures contract gained 13% on the continuous monthly close chart.

Live Cattle: The spot-month contract closed 0.375 higher. The major (long-term) trend is sideways to up. The more active February contract moved through the previous high of $134.50 (December 2012) while monthly stochastics climbed above 80%, indicating the market is overbought and nearing a possible move to a downtrend. A December close to December close comparison of the most active futures contract shows the market gained 2% over the course of 2013.

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Posted at 9:52AM CST 01/01/14 by Darin Newsom
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