Technically Speaking
Darin Newsom DTN Senior Analyst

Sunday 06/29/14

Ag Markets: Weekly Analysis

Corn: The September contract closed 6.00cts lower. The secondary (intermediate-term) trend is sideways to down. The contract continues to hold above support at its low of $4.28 1/4 from the week of December 30, 2013. Noncommercial traders continue to sell the market, adding another 31,714 short contracts and reduced their net-long futures position by 37,285 contracts. Additional pressure is coming from commercial interests, as indicated by the strengthening carry in both the July to Sep and Sep to Dec futures spreads.

New-crop Corn: The December contract closed 4.75cts lower. The secondary (intermediate-term) trend is sideways to down. The contract is holding above its low of $4.35 (week of January 6, 2014), though pressure from both commercial and noncommercial traders could lead to another test of this low in the near future. Commercial selling is indicated by the strengthening carry in the Dec to March futures spread. Weekly stochastics are below the oversold level of 20% meaning the market could soon see a bullish crossover into an uptrend.

Soybeans: The August contract closed 16.50cts higher. Despite the higher weekly close the secondary (intermediate-term) trend is sideways to down. The contract is consolidating above support at $13.50 1/2, a price that marks the 38.2% retracement level of the previous uptrend from $11.75 through the high of $14.59. Continued noncommercial selling has been offset by commercial support. The most recent CFTC report showed noncommercial traders increasing their short position by 9,489 contracts and reducing their net-long futures holdings by 11,034 contracts. The 50% retracement level is down at $13.17.

New-crop Soybeans: The November contract closed 3.50cts lower. Weekly stochastics indicated the trend of the market remains down. The contract has been consolidating above support at $12.15 1/2, a price that marks the 33% retracement level of the uptrend from $10.88 1/4 through the high of $12.79. The 50% retracement level is near $11.83 3/4. Resistance remains at $12.51 1/2, the 67% retracement level of the downtrend from $13.33 through the low of $10.88 1/4.

Wheat: The September Kansas City contract closed 7.50cts higher. Despite the higher weekly close the trend of the market remains sideways to down. However, the contract continues to hold support between $7.03 3/4 and $6.91 1/2, prices that mark the 61.85 and 67% retracement levels of the previous uptrend from $6.08 3/4 through the high of $8.57 1/4. Support continues to come from the commercial side of the market, indicated by the weakening carry in the Sep to Dec futures spread (closed last week at 4 3/4 cents). Noncommercial traders continue to sell the Chicago market, with the latest CFTC report showing them adding 28,750 contracts to their net-short futures position.

Cotton: The December contract closed 2.23cts lower. The secondary (intermediate-term) trend remains down. However, last week's move to a new low of 73.71 could be viewed as a spike low given that weekly stochastics are well below the oversold level of 20%, setting the stage for a bullish crossover in the near future. Pressure continues to come from both commercial and noncommercial traders, though selling by the latter has started to slow. Commercial pressure continues to build though, as indicated by the sharp downtrend in the Dec to Mar futures spread (closed at a 1.35cts carry Friday).

Live Cattle: The August contract closed $4.80 higher. The secondary (intermediate-term) trend is up. The contract (the cattle market in general) remains in a sharp uptrend with no indication of where a top might occur. However, after posting a new high of $153.025 the contract did fall back slightly close at $151.125 for the week. Weekly stochastics show the contract (market) is overbought. A warning flag of the tide beginning to turn would be weakening basis (difference between cash and futures prices) and a move to a downtrend in the August to October futures spread. The latter may have begun with last week's activity, though confirmation will need to be seen this coming week.

The most recent CFTC Commitments of Traders report was for positions held as of Tuesday, June 24.

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

Posted at 7:32AM CDT 06/29/14 by Darin Newsom
Post a Blog Comment:
Your Comment:
DTN reserves the right to delete comments posted to any of our blogs and forums, for reasons including profanity, libel, irrelevant personal attacks and advertisements.
Blog Home Pages
October  2014
S M T W T F S
         1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31   
Subscribe to Technically Speaking RSS
Recent Blog Posts