Technically Speaking
Darin Newsom DTN Senior Analyst

Sunday 02/02/14

Ag Markets: Weekly Analysis

Corn: The March contract closed 5.50cts higher. The secondary (intermediate-term) trend on the weekly chart is sideways to up. Weekly stochastics remain bullish, while the weekly CFTC Commitments of Traders report showed noncommercial traders once again covering a portion of their net-short-futures position (as of the week ending Tuesday, January 28). The March contract remains in a range between roughly $4.20 and $4.40. National average basis (DTN National Corn Index minus the March futures contract) remains firm at 19 cents under while the trend in the March to May futures spread is up (bullish).

Soybeans: The March contract closed 2.00cts lower. The secondary (intermediate-term) trend remains sideways. However, with national average basis (DTN National Soybean Index minus the March futures contract) weakening about 2.5 cents last week and the inverse in the March to May futures spread losing 0.5 cent, the futures market could come under increased pressure. Support is pegged near $12.41 3/4.

Wheat: The Chicago March contract closed 9.50cts lower. The secondary (intermediate-term) trend on the weekly chart remains down. However, national average basis (DTN National SRW Index minus the March futures contract) strengthened to about 22 cents under while the nearby March to May futures spread saw its carry weaken to a carry of only 2.50 cents. These bullish fundamental factors should eventually spark a rally in the futures market, given how sharply oversold weekly stochastics are.

Cotton: The March contract closed 1.38cts lower. Despite last week's sell-off the secondary (intermediate-term) trend remains up, according to weekly stochastics. Support is pegged between 84.51 and 82.54, the 33% and 50% retracement levels of the previous rally from 76.65 through the recent high of 88.43. Resistance remains between 85.96 and the recent high.

Live Cattle: The April contract closed 0.325 higher. Despite the higher close this past week the secondary (intermediate-term) trend remains down. Weekly stochastics established a bearish key reversal the week of January 20, a signal that is still in effect. Given the continued bullish commercial outlook indicated by the April to June futures spread, the possible sell-off should be limited to 38.2% and 50%, putting support between roughly $136.40 and $134.325.

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Posted at 11:16AM CST 02/02/14 by Darin Newsom
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