Technically Speaking
Darin Newsom DTN Senior Analyst

Monday 05/26/14

Ag Markets: Weekly Analysis

Corn: The July contract closed 5.50cts lower. The secondary (intermediate-term) trend remains down. Weekly stochastics established a bearish crossover the week of April 6, with the futures contract confirming this signal by making a new four-week low the week of May 11. Support is pegged at $4.73, a price that marks the 50% retracement level of the uptrend from $4.21 3/4 through the high of $5.24 1/4. Beyond that is the 67% retracement level of $4.55 3/4.

New-crop Corn: The December contract closed 5.75cts lower. The secondary (intermediate-term) trend is down. Weekly stochastics established a bearish crossover the week of April 7, with the futures contract confirming this signal by establishing a new four-week low the week of May 12. Initial support was at $4.76, a price that marks the 50% retracement level of the uptrend from $4.35 through the high of $5.17. This past week saw the contract test support near $4.62 1/4, the 67% retracement level.

Soybeans: The July contract closed 50.50cts higher. The secondary (intermediate-term) trend is sideways to up. Weekly stochastics are bullish, but above the overbought level of 80% increasing the likelihood of establishing yet another bearish crossover (last one occurring the week of April 27). The coming holiday-shortened week will be important to the market as a major (long-term) bullish outside month or bearish key reversal should be established depending on Friday's close, the monthly close, in relation to April's settlement of $15.12 3/4.

New-crop Soybeans: The November contract closed 44.75cts higher. The secondary (intermediate-term) trend remains up. However, weekly stochastics are well above the overbought level of 80%, increasing the likelihood of establishing a bearish crossover in the near future. The contract spiked above technical resistance at $12.51 50, a price that marks the 67% retracement level of the downtrend from $13.33 through the low of $10.88 1/4. Next resistance could be found near the previous high of $13.00.

Wheat: The new-crop July Kansas City contract closed 22.75cts lower. The secondary (intermediate-term) is sideways to down. Despite the sharp sell-off seen the last two weeks, the contract has not established technical signals indicating a move to a downtrend. Technical support is at $7.27 1/4, a price that marks the 50% retracement level of the uptrend from $5.99 through the high of $8.55 1/2. The contract also seems to be in the process of establishing a head-and-shoulders top formation, but needs a rally back to near $7.98 before breaking the neckline.

Cotton: The July contract closed 3.51cts lower. The secondary (intermediate-term) trend remains down. Weekly stochastics established a primary bearish crossover the week of February 23, 2014 and a secondary signal the week of March 23. The futures contract has since fallen to a test of support at 86.31, a price that marks the 50% retracement level of the uptrend from 75.35 through the high of 97.28. Given weekly stochastics remain bearish the July contract could next test support between 83.73 and 82.65, the 61.8% and 67% retracement levels.

New-crop Cotton: The December contract closed 2.87cts lower. The secondary (intermediate-term) trend is down. Weekly stochastics remains bearish after establishing a bearish crossover above the overbought 80% level the week of May 11. Since then the futures contract has fallen quickly to a test of support between 80.00 and 78.88, prices that mark the 50% and 61.8% retracement levels of the uptrend from 75.25 through the high of 84.74. The 67% retracement level is pegged at 78.41, equal to last week's posted low.

Live Cattle: The June contract closed $1.60 lower. The secondary (intermediate-term) trend is down. After establishing a double-top formation with the previous high of $139.95 (last week's high was $139.875) the June contract took out the previous week's low of $136.625 and closed lower for this week. This created a bearish reversal, confirming the downtrend indicated by weekly stochastics. Initial support is pegged near $133.85, a price that marks the 33% retracement level of the uptrend from $121.575 through the previously mentioned high. Additional support is back at the 50% retracement level near $130.75.

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Posted at 9:44AM CDT 05/26/14 by Darin Newsom
Comments (1)
To DTN Pro Subscribers: A change is being made to the soybean strategy before the open of trade Monday evening. Check your systems. Thanks.
Posted by DARIN NEWSOM at 10:22AM CDT 05/26/14
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