Technically Speaking

Corn: The July contract closed 12.25cts lower. The contract posted a solid rally off its test of initial support near $4.90, a price that marks the 33% retracement level of the previous uptrend from $4.21 3/4 through the high of $5.24 1/4 (week of April 7). Last week's rally established a bullish outside pattern on the contract's weekly chart, while stochastics continue to show an overbought situation. Follow-through buying could lead to a test of resistance near $5.18 3/4, a price that marks the 38.2% retracement level of the previous downtrend from $6.76 through the low of $4.21 3/4.

New-crop Corn: The December contract closed 9.50cts higher. The secondary (intermediate-term) trend has turned sideways on the weekly chart. Similar to the July contract, new-crop December posted a bullish outside pattern on its price chart last week, indicating a possible continued rally this week. The next target is $5.24 1/2, a price that marks the 50% retracement level of the previous downtrend from $6.14 through the low of $4.35. Weekly stochastics remain above the overbought level of 80% and bearish.

Soybeans: The July contract closed 8.00cts lower. Despite the lower weekly close, the secondary (intermediate-term) trend remains up. However, weekly stochastics are near 90% showing a sharply overbought situation. With the inverse in futures spreads weakening, reflecting a less bullish commercial outlook, the market could start to come under pressure as it tests resistance at its recent high of $15.21. Major (long-term) resistance on the monthly chart is near $15.49 3/4, a price that marks the 61.8% retracement level of the previous major downtrend from $17.89 (September 2012) through the low of $11.62 1/2 (August 2013).

New-crop Soybeans: The November contract closed 0.50ct higher. The secondary (intermediate-term) trend remains up. However, weekly stochastics are above the 90% indicating a sharply overbought situation. The spot-month contract is testing price resistance between $12.39 1/2 and $12.51 1/2, prices that mark the 61.8% and 67% retracement levels of the previous downtrend from the high of $13.33 through the low of $10.88 1/2. The November to January futures spread continues to trend sideways, its small carry still reflecting a bullish market view of supply and demand.

Wheat: The new-crop July Kansas City contract closed 14.50cts higher. Weekly stochastics show the secondary (intermediate-term) trend remains sideways to up. The July KC wheat contract is testing resistance between $7.77 3/4, a price that marks the 67% retracement level of its previous downtrend from $8.67 through the low of $5.99, and its recent high of $7.94 1/2. Given weekly stochastics above the overbought level of 80%, the contract could soon establish a double-top formation. However, if July KC wheat is able to make a substantive move above its previous high it would imply a possible test of the contract high of $8.67 (November 5, 2012).

Cotton: The July contract closed 0.91ct higher. Despite the higher weekly close the secondary (intermediate-term) trend remains down. Initial support is between 90.43 and 89.49, prices that mark the 33% and 38.2% retracement levels of the previous uptrend from 77.74 through the recent high of 96.76. The contract continues to consolidate, testing resistance between 92.40 and 94.07. Weekly stochastics remain bearish.

New-crop Cotton: The December contract closed 0.77ct higher. The secondary (intermediate-term) trend remains up. However, weekly stochastics are well above 90% indicating a sharply overbought situation. The strengthening inverse in the new-crop December to March futures spread indicates continued support from commercial traders. Despite being overbought, the market structure of the contract could result in a test of its high of 86.00.

Live Cattle: The June contract closed 2.400 higher. Despite weekly stochastics suggesting the secondary (intermediate-term) trend remains down, the contract seems on a path to test its high of $139.00. Given the recent weakening of the June to August futures spread (less bullish commercial outlook), a double-top formation would seem in order. The most recent CFTC report showed noncommercial traders liquidating a portion of their net-long futures position. Eventually this combination of factors could lead to a test of initial support near $133.20, a price that marks the 33% retracement level of the uptrend from $121.575 through the contract high of $139.00.

The most recent CFTC Commitments of Traders report was for positions held as of Tuesday, April 22.

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