Technically Speaking

Corn (Futures): The December contract closed at $3.76 3/4, 56cts higher for the month. The major (long-term) trend has turned up. October saw the December contract establish a new low of $3.18 1/4 before rallying above the September high of $3.67 1/2, establishing a bullish key reversal on the monthly chart. In conjunction with that, monthly stochastics established a secondary (confirming) bullish crossover below the oversold level of 20% but above the initial crossover from January 2014. With the forward curve in the market indicating bearish fundamentals, the newly established major uptrend could find resistance near $5.21, a price that marks the 38.2% retracement level of the previous downtrend from $8.49 (August 2012) through the October 2014 low.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.36, up 52 cents for the month. The NCI.X fell 1 3/4 cent short of establishing a bullish key reversal, similar to what was seen in the corn futures market. However, closing at its high for the month leaves open the possibility of a bullish breakaway gap in November. And when combined with the bearish gap left on the monthly chart last July, would establish an island bottom formation. Monthly stochastics established a secondary (confirming) bullish crossover below the oversold level of 20% but above the initial crossover posted at the end of February 2014. This would indicate the trend of the market has turned up, putting the long-term price target near $4.90. This price marks the 38.2% retracement level of the previous downtrend from $8.26 (August 2012) through $2.81 (October 2014).

Soybeans (Futures): The January contract closed at $10.49 1/4, $1.36 higher for the month. The major (long-term) trend has turned up. The month October saw the more active November contract replaced by the January, with the former posting a new low of $9.04 before rallying above the September high of $10.38. This combined with a higher monthly close established a bullish key reversal. However, the market could see a period of consolidation as monthly stochastics did not post a bullish crossover. Major support remains at $9.28 1/4, the 50% retracement level of the uptrend from $4.98 1/2 (February 2005) through $17.89 (September 2012). The market's neutral to bullish forward curve puts the long-term price target at $13.46 1/2.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.86, up $1.29 for the month. Unlike the futures market, the NSI.X did not establish a bullish key reversal in October, nor did its monthly stochastics post a bullish crossover below the oversold level of 20%. Therefore, technically, the major (long-term) trend of the market remains down. However, the NSI.X did settle at its high for the month, leaving the door open for a potential bullish gap up in November. Given that the market left a bearish gap down in September 2014, such a move would establish an island bottom that would likely lead to the aforementioned bullish crossover by monthly stochastics at the end of November.

SRW Wheat (Futures): The December Chicago contract closed at $5.32 1/2, 54.75cts higher for the month. October activity saw the December contract post an inside month, meaning the trading range was held within that established during September (high of $5.53, low of $4.66 1/4). This is generally viewed as consolidation, meaning a possible change in trend over the coming months. However, monthly stochastics are already indicating the market is set to move up posting a secondary (confirming) bullish crossover below the oversold level of 20% yet above the initial crossover established back at the end of February 2014. If the major (long-term) trend has turned up its initial target would be near $6.26 1/2, a price that marks the 33% retracement level of the previous selloff from $9.47 1/4 (July 2012) through the September 2014 low.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.93, up $0.65 for the month. The SR.X posted similar technical signals as the Chicago futures market in October, establishing an inside month (trading within the September range of $5.10 to $4.25) while finishing with a bullish secondary (confirming) crossover by monthly stochastics. As with the futures market, the latter signal would indicate the major (long-term) trend has turned up, putting the initial target near $5.88. This price marks the $33% retracement level of the selloff from $9.14 (July 2012) through the September 2014 low.

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Commodity trading is very complicated and the risk of loss is substantial. The author does not engage in any commodity trading activity for his own account or for others. The information provided is general, and is NOT a substitute for your own independent business judgment or the advice of a registered Commodity Trading Adviser.