Technically Speaking

Corn: The DTN National Corn Index (NCI.X, national average cash price) closed at $3.30, down 9 cents for the week. National average basis (NCI.X minus the futures market) was calculated at 26 cents under the December contract, 1 cent weaker for the week. Weekly price distribution studies (close only) show the market to be underpriced. Last week's close puts the NCI.X in the lower 9% of the 5-year range, the lower 31% of the 10-year, the lower 23% since the beginning of corn's demand market with the 2005-2006 marketing year, and the lower 37% of the range since total domestic demand climbed above 10 bb during the 2003-2004 marketing year.

Corn: The December contract closed 8.75cts lower. December corn is showing mixed trend signals, with the move to a new low of $3.43 3/4 last week indicating a continued downtrend with a target price near $3.35. However, the rally off this new low at the end of the week established a bullish crossover by weekly stochastics below the oversold level of 20% hinting a move to a secondary sideways trend and possibly and uptrend.

Soybeans: The DTN National Soybean Index (NSI.X, national average cash price) closed at $11.48, down $0.32 for the week. National average basis (NSI.X minus the futures market) was calculated at $1.27 over the November contract, 28 cents weaker for the week. However, basis could be skewed by cash buyers moving to new-crop only given the tight supply of old-crop soybeans. The NSI.X was priced in the lower 28% of the 5-year price distribution range (weekly close only). Seasonally the cash soybean market tends to trend down through the first week of October.

Soybeans: The November contract closed 2.75cts lower. Given that the November contract posted a new low of $10.01 1/4 last week, it could be argued that the secondary (intermediate-term) trend remains down. However, using candlestick chart analysis, the contract's strong rally to close near where it opened last week ($10.21 1/2, $10.20 3/4) creates a doji formation, that in combination with a bullish engulfing pattern on the minor (short-term) daily chart indicates the trend has turned up. Also, weekly stochastics established a bullish crossover below the oversold level of 20%. If the trend has changed the initial upside target is $10.93 3/4, the 33% retracement level of the previous downtrend from $12.79 through last week's low.

Wheat: The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.91, down 24 cents for the week. National average basis was calculated Friday at 45 cents under the December Chicago contract, 3 cents stronger for the week. The trend of SR.X remains down as it remains priced below major (long-term) support near $5.12 3/4, the 67% retracement level of the uptrend from $3.12 (December 2008 low) through the high of $9.l4 (July 2012 high).

SRW Wheat: The December contract closed 28.25cts lower. The secondary (intermediate-term) trend has turned down again. Bullish technical signals established a week ago were erased as the contract fell to a new low of $5.27 1/2 last week. However, this could be a characteristic head fake by the wheat market, meaning it could quickly rally back above the low end of its recent sideways trend at $5.42 1/4. The major (long-term) continuous monthly chart shows a narrowing sideways trading pattern with support at the August 2014 low of $5.27 1/4 then the July 2014 low of $5.18 1/2.

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