Technically Speaking
Darin Newsom DTN Senior Analyst

Sunday 08/10/14

Grain Markets: Weekly Analysis

Corn: The DTN National Corn Index (NCI.X, national average cash price) closed at $3.33, unchanged for the week. This remains the lowest weekly close for the NCI.X since the week of July 19, 2010. National average basis (NCI.X - September futures) strengthened 1-cent for the week, calculated at 19-cents under Friday evening. This continues to run below the 5-year average, reflecting the bearish view of cash grain merchandisers. Technically the NCI.X is testing major (long-term) support between $3.44 and $3.19.

New-crop Corn: The December contract closed 1.25cts lower. The secondary (intermediate-term) trend remains down Dec corn posted a new low of $3.61 last week before closing at $3.63 1/2. Some factors remain bullish, most notably the market being sharply oversold with the Dec priced in the lower 10% of corn's 5-year distribution range. Technically, weekly stochastics remain in the low single digits indicating, at least theoretically, little room for the market to continue to go down. Both the September and December contracts are testing major (long-term) support on the monthly chart between $3.70 and $3.43 1/4.

Soybeans: The DTN National Soybean Index (NSI.X, national average cash price) closed at $11.95, up $0.15 for the week. The NSI.X remains near the lower 33% of its 5-year distribution range, a level that could spark renewed buying attention. National average basis continues to weaken, with the NSI.X losing another 11 cents to the November futures last week but still resulting in a firm reading of $1.10 over.

New-crop Soybeans: The November contract closed 26.25cts higher. Similar to December corn, it is a difficult call on trend in November soybeans. Technically, the contract established a new low of $10.54 last week, confirming that the secondary (intermediate-term) trend remains down, but weekly stochastics indicate the contract is sharply oversold and poised for a bullish turn. The difference between the two contracts is that Nov beans closed near its weekly high, leaving open the possibility of a bullish island reversal with a gap higher open to Sunday night's CME Globex session. This would be in conjunction with the gap down left the week of July 7.

Wheat: The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $5.19, up $0.15 for the week. National average basis was calculated Friday at 31 cents under the September Chicago contract, 1 cent weaker than the previous week.

SRW Wheat: The September contract closed 15.00cts higher. Weekly stochastics continue to indicate the secondary (intermediate-term) trend is up. Initial resistance is pegged near $5.97 1/4, a price that marks the 33% retracement level of the previous downtrend from $7.51 3/4 through the recent low of $5.20 1/4. Friday's weekly CFTC Commitments of Traders report showed noncommercial traders reducing their net-short futures position by 7,000 contracts (week ending Tuesday, July 5).

Posted at 8:59AM CDT 08/10/14 by Darin Newsom
Comments (1)
Darin, with this "cheap" grain prices the USDA has succeeded with their "estimates", what determines the price of grain for exports? Does the USDA "report" the price of grain when exported? Does the almighty USDA report profits from grain exported? Also do they report who is exporting the grain or other commodities and how much money is made with exports? Thank you if you have the time to answer these questions.
Posted by DAVID/KEVIN GRUENHAGEN at 10:12PM CDT 08/13/14
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