Technically Speaking
Darin Newsom DTN Senior Analyst

Sunday 08/24/14

Grain Markets: Weekly Analysis

Source: DTN ProphetX

Corn: The DTN National Corn Index (NCI.X, national average cash price) closed at $3.48 1/2, up $0.015 for the week. National average basis strengthened by about 2 cents, coming in at 18 cents (rounded) under the September futures contract. The NCI.X remains priced near the lower-third of numerous price distribution ranges, including the 5-year and 10-year. This could spark increased buying interest in the cash market.

New-crop Corn: The December contract closed 5.50cts lower. Despite the lower weekly close the secondary (intermediate-term) trend remains up. A number of bullish technical signals have been established the last two weeks including a bullish key reversal, a bullish crossover below 20% by weekly stochastics, and consecutive weeks of posting new 4-week highs. From a technical perspective, the initial upside price target is near $4.18 3/4, the 38.2% retracement level of the downtrend from $5.17 through the recent low of $3.58. A test of this resistance would also close the bearish price gap between $4.14 1/2 and $4.10 1/2.

Soybeans: The DTN National Soybean Index (NSI.X, national average cash price) closed at $12.00, up $0.31 for the week. National average basis firmed to $1.58 over the November futures contract, 42 cents stronger than the previous Friday's calculation. Support for the cash market continues to come from solid demand as the old-crop marketing year nears its end this coming week. Seasonally the cash market sees its strongest sell-off through the month of September.

New-crop Soybeans: The November contract closed 10.00cts lower. Technically, the secondary (intermediate-term) trend remains down following the posting of a new low of $10.35. However, the November to January futures spread is poised for a move to an uptrend with a weekly close of a carry less than 6 3/4 cents (last week's settlement). Weekly stochastics are below 20%, indicating the market is oversold and in position for a possible bullish crossover. The major (long-term) trend remains down with support pegged between $9.91 1/2 and $9.28 1/4.

Wheat: The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $5.18, down $0.01 for the week. National average basis was calculated Friday at 34 cents under the September Chicago contract, 2 cents weaker for the week. Major (long-term) support remains at the July low of $4.89.

SRW Wheat: The December contract closed 1.25cts lower. The secondary (intermediate-term) trend remains sideways. While weekly stochastics did establish a bullish crossover the previous week, the December futures contract hasn't established a bullish turn signal yet. Resistance this coming week is at the 4-week high of $5.91. Support is at the recent low of $4.42 1/4.

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

Posted at 1:37PM CDT 08/24/14 by Darin Newsom
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