Technically Speaking

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.06, up 13 cents for the week. The intermediate-term trend on the weekly chart is up, in step with the market's seasonal index through October. Last week's higher close established a secondary bullish crossover by weekly stochastics. The initial bullish crossover occurred the week of August 11. However, given the strengthening carry in futures spreads, look for basis to weaken meaning the cash market should continue to lose ground to the rally in the futures market.

Corn (Futures): The December contract closed 14.00cts higher. The secondary (intermediate-term) trend remains up, in line with the market's seasonal index through October. With the carry in the December to March futures spread strengthening, the secondary uptrend could be limited to between $3.65 and $3.84. These pries mark the 23.6% and 33% retracement levels of the previous downtrend from $5.17 through the recent low of $3.18 1/4. Support continues to come from noncommercial buying, with Friday's CFTC report showing this group increasing their net-long futures position by 17,254 contracts due to short-covering of 29,351 contracts.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.92, up 29 cents for the week. The higher close led to weekly stochastics posting a secondary bullish crossover, the initial occurring the week of August 18, indicating the intermediate-term trend has turned up. Seasonally, both the 5-year and 10-year indexes show the cash market tends to trend up through October, with the 5-year then showing a downturn through late November. Initial support could come from the commercial side of the market, with soybean future's forward curve still indicating a neutral long-term outlook. National average basis was unchanged for the week at 60 cents under the November futures contract.

Soybeans (Futures): The November contract closed 29.25cts higher. The secondary (intermediate-term) trend remains up, with support coming from noncommercial traders. This group reduced their net-short futures position by 9,083 contracts by adding to their long futures potion by 11,799 contracts. On the other hand, this means they also added 2,716 contracts of short futures. The market's forward curve (series of futures spreads) remains neutral, with the November to July carry covering approximately 54% of full cost of carry (total cost to hold beans in commercial storage). Technically this could allow the November contract to extend its rally to between $10.28 and $10.47, though resistance might be seen near $9.92 1/2.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.74, up 20 cents for the week. The secondary (intermediate-term) remains up, in line with the market's 5-year seasonal index that shows the cash market tends to rally through the first weekly close in November. Resistance is pegged near $5.20, a price that marks the 33% retracement level of the previous downtrend from $7.11 through the low of $4.25. However, the cash market could find possible selling at the 23.6% retracement level near $4.93. Friday's national average basis was calculated at 42 cents under the December futures contract, 2 cents stronger for the week.

SRW Wheat (Futures): The December Chicago contract closed 17.50cts higher. The secondary (intermediate-term) trend remains up, in line with the market's 5-year seasonal index that shows a tendency to rally through the end of October. Initial resistance is pegged at $5.65 3/4, a price that marks the 33% retracement level of the previous downtrend from $7.65 through the low of $4.66 1/4. Recent weeks have seen a strong uptrend, weakening carry, in the December to March futures spread indicating a less bearish commercial outlook. However, given last week's slight downturn in this trend, this spread will need to be watched closely in the coming weeks. Additional support continues to come from the noncommercial side of the market, with last Friday's CFTC Commitments of Traders report showing this group reducing their net-short futures position by 6,582 contracts. The bulk of this came from short-covering of 6,356 contracts.

Last Friday's CFTC Commitments of Traders report showed positions as of Tuesday, October 14.

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