Technically Speaking
Darin Newsom DTN Senior Analyst

Sunday 06/08/14

Ag Markets: Weekly Analysis

Corn: The July contract closed 6.75cts lower. The secondary (intermediate-term) trend remains down. After posting a spike low of $4.47, well below technical support near $4.56, the contract was able to rally late in the week. Despite this move July corn remains bearish, meaning a retest of the recent low is likely. Friday's CFTC report showed noncommercial traders liquidated 3,417 contracts of their net-long futures position.

New-crop Corn: The December contract closed 0.25cts higher. While the secondary (intermediate-term) trend remains down, as indicated by bearish weekly stochastics, the contract was able to post a sharp rally off its weekly low to close higher. Support is now pegged at last week's low $4.45 1/4, just above the previous low of $4.35. Pressure from the commercial side of the market could lead to a test of these support areas.

Soybeans: The July contract closed 36.25cts lower. Weekly stochastics indicate the secondary (intermediate-term) trend has turned down. However, the contract itself has not yet established such a signal. It is possible to see it early this week though, with the four-week low (last week's low) of $14.56 just below Friday's close of $14.57. The Four-Week Rule states that the establishment of a new four-week low indicates a change in trend. The weekly CFTC report showed noncommercial traders liquidation 21,769 contracts of their net-long futures position.

New-crop Soybeans: The November contract closed 15.00cts lower. Unlike the old-crop July contract, the November did post a new four-week low last week. In combination with the recent bearish crossover by weekly stochastics, the secondary (intermediate-term) trend is down. However, last week's low of $12.18 3/4 was a test of initial support near $11.95 3/4. This price marks the 33% retracement level of the previous uptrend from $10.88 1/4 through the recent high of $12.79. The 50% retracement level is back at $11.68 3/4.

Wheat: The July Kansas City contract closed 12.50cts higher. While the secondary (intermediate-term) remains down, the futures contract posted an impressive rally off its weekly low of $7.06. Friday's close of $7.35 1/2 was back above technical price support at $7.27 1/4, the 50% retracement level of the uptrend from $5.99 through the high of $8.55 1/2. Weekly stochastics remain bearish, but could level out indicating a move to a sideways trend. Weekly CFTC numbers showed noncommercial traders liquidating 9,686 contracts of their net-long futures position in the Chicago market through early last week.

Cotton: The July contract closed 1.49cts lower. The secondary (intermediate-term) trend remains down. Weekly stochastics are bearish, but nearing the oversold level of 20%, as the futures contract nears support at 84.07. This price marks the 67% retracement level of the previous uptrend from 77.74 through the high of 96.76. Friday's CFTC Commitments of Traders report showed noncommercial interests liquidation 3,801 contracts of their net-long futures position.

New-crop Cotton: The December contract closed 0.53ct higher. The secondary (intermediate-term) trend is down. However, the futures contract was able to rally off its low of 76.87 to close higher for the week. Weekly stochastics remain bearish, indicating the contract could pull back to a test of last week's low, if not the previous low of 75.25.

Live Cattle: The August contract closed $2.70 higher. The secondary (intermediate-term) trend looks to have turned up again with the contract posting a new high of $142.00 last week. Weekly stochastics have moved back above the overbought level of 80%, though possible bearishness created by this technical signal has been offset by continued commercial buying indicated by the uptrend in the August to October futures spread.

The most recent CFTC Commitments of Traders report was for positions held as of Tuesday, June 3.

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

Posted at 8:38AM CDT 06/08/14 by Darin Newsom
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