Technically Speaking
Darin Newsom DTN Senior Analyst

Sunday 03/02/14

Ag Markets: Weekly Analysis

Corn: The May contract closed 4.5cts higher. The secondary (intermediate-term) trend on the weekly chart remains up. However, weekly stochastics above 80% are indicating the contract has moved into an overbought situation, opening the door for a round of short-term selling. Secondary resistance remains at $5.01 3/4, the 33% retracement level of the previous downtrend from $6.76 1/2 through the low of $4.14 1/2. The CFTC Commitments of Traders report showed noncommercial interests adding 72,666 contracts to their net-long futures position.

Soybeans: The May contract closed 53.75cts higher. The secondary (intermediate-term) trend remains up with the May contract posting a new high of $14.45 1/2 last week. Major (long-term) resistance on the market's monthly chart is between $14.01 3/4 and $14.75 3/4. The weekly CFTC Commitments of Traders report showed noncommercials added 12,485 contracts to their net-long futures position. However, weekly stochastics above 80% indicate the market is now overbought, meaning buying interest could begin to slow.

Wheat: The Chicago May contract closed 11.25cts higher. The secondary (intermediate-term) trend on the weekly chart remains up. However, the establishment of a bearish reversal on the contract's weekly chart indicates the minor (short-term) trend could turn down. If so, initial support is pegged between $5.97 3/4 and $5.86 3/4, prices that mark the 33% and 50% retracement levels of the initial rally from $5.53 1/2 through last week's high of $6.20. Friday's weekly CFTC Commitments of Traders report showed noncommercial traders reducing their net-short futures position by 8,284 contracts.

Cotton: The May contract closed 1.21cts lower. The secondary (intermediate-term) trend has turned down. The May contract established a bearish key reversal on its weekly chart, in conjunction with a bearish crossover by weekly stochastics above 80%. Initial support is pegged at 86.02 then 83.81, prices that mark the 33% and 50% retracement levels of the previous uptrend from 77.18 through last week's high of 90.44. Friday's weekly CFTC Commitments of Traders report showed noncommercial interests reducing their net-long futures position by 3,685 contracts.

Live Cattle: The April contract closed 3.525 higher. The secondary (intermediate-term) trend remains up with the April contract posting a new high of $145.975 last week. However, weekly stochastics are well above 80% indicating the market is in an overbought position. If April live cattle come under pressure, the initial downside target would be near $139.175. Support continues to come from bullish fundamentals, indicated by action in the April to June futures spread. Friday's weekly CFTC Commitments of Traders report showed light pressure developing from noncommercial interests as this group reduced their net-long by futures position by 6,310 contracts.

The most recent CFTC Commitments of Traders report was for positions held as of Tuesday, February 25.

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

Posted at 8:51AM CST 03/02/14 by Darin Newsom
Comments (2)
I was interested in your thoughts on the Russian/Ukraine situation and the possibility of an embargo of grains or ag products in general. I'm not even sure how much of our exports are purchased by the new Russia. We don't really need something like that right now.
Posted by TOM DRAPER at 7:26PM CST 03/02/14
Good morning Tom. Great question. I am going to be talking about this situation in an On the Market column Tuesday.
Posted by DARIN NEWSOM at 7:29AM CST 03/03/14
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