Technically Speaking
Darin Newsom DTN Senior Analyst

Thursday 01/09/14

Before the Storm

All we can do now is wait. Yes, there are hours that needed to be passed before the release of USDA's January reports, numbers that could possibly have a long-term effect on the agriculture sector in general. And has been discussed countless times, the world of agriculture belongs to corn with all others simply playing their parts.

Source: DTN ProphetX

What is the technical outlook for corn leading up to and following the reports then? A look at the long-term monthly chart doesn't provide that many clues. (For an in depth discussion of corn's situation heading into the reports, keep an eye out early Friday morning for my latest On the Market column.)

The major (long-term) trend of the market remains down with the nearby March contract already establishing a new low of $4.08 this month. This downtrend is confirmed by monthly stochastics (second study), though both the faster moving blue line and slower moving red lines are well below the oversold level of 20% (4.6% and 11.4% respectively) indicating that a bullish turn is due to occur at some point. The nearby futures spread (third study, green line) continues to show a carry of about 8 1/4 cents, covering a slightly bearish 67.5% of full commercial carry (not shown).

Mixed technical signals. That's the best way to describe the chart situation as report release time draws closer. When all is said and done, either side (market bulls or market bears) will have plenty of ammunition to make a strong argument that the market is still headed in the correct direction, whichever direction that might be.

Have a peaceful evening and I'll see everyone back here bright and early Friday morning.

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

Posted at 3:51PM CST 01/09/14 by Darin Newsom
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