Technically Speaking

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.76, up 4 cents for the week. While the secondary (intermediate-term) trend remains up, weekly stochastics are above 90% indicating the cash market is sharply overbought. Such a market could quickly establish a bearish crossover (weekly stochastics) meaning a move to a secondary downtrend. The NCI.X is within striking distance of its next target of $3.84, a price that marks the 50% retracement level of the previous downtrend from $4.86 through the low of $2.81. National average basis was calculated at 34 cents under Friday evening, slightly weaker than the 5-year average of 28 cents under but stronger than 2009-2010 national average basis for the same week of 52 cents under.

Corn (Old-crop): The March contract closed 3.00cts higher at $4.10 1/2. The secondary (intermediate-term) trend remains up with the March contract posting a new high (for the uptrend) of $4.14. With weekly stochastics already above 90%, indicating a sharply overbought situation, March corn could have difficulty extending this rally to its next target of $4.26 3/4. This price marks the 50% retracement level of the previous downtrend from $5.23 through the low of $3.30 1/2, and would also close a bearish gap left the week of July 7 ($4.26 to $4.23 1/4). While Friday's CFTC Commitments of Traders report showed the noncommercial net-long position increasing by 2,711 contracts, it was accomplished by short-covering of 7,629 contracts offset by reducing their long position by 4,918 contracts.

Corn (New-crop): The December contract closed 3.25cts higher at $4.35. The secondary (intermediate-term) trend remains up with the December contract testing resistance near $4.34. This price marks the 50% retracement level of the previous downtrend from $5.04 through the low of $3.64 1/4. Given that the December 2015 to March 2016 continues to show a neutral level of carry, the contract may start to find increased selling interest. Also, weekly stochastics are near 90% or higher indicating a sharply overbought situation.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.82, down 18 cents for the week. While the NSI.X trends sideways between resistance at the recent high of $10.08 and support near $9.56, weekly stochastics continue to indicate the secondary (intermediate-term) trend is up with the next target $10.66. This price marks the 33% retracement level of the previous downtrend from $14.97 through the low of $8.50. National average basis was calculated Friday evening at about 49 cents under (the January contract), roughly 1-cent weaker for the week. The 5-year average is 43 cents under.

Soybeans (old-crop): The January contract closed 16.75cts lower at $10.30 1/2. While the futures contract continues to consolidate between resistance at $10.54 1/4 and support at $10.19 3/4, weekly stochastics show the secondary (intermediate-term) trend is up. However, these same stochastics are nearing a minor bearish crossover that would confirm a move to a sideways trend. Recent pressure has come from both commercial traders, indicated by the strengthening carry in the market's forward curve (though still at a neutral level of full commercial carry), and noncommercial activity. Friday's CFTC report showed the latter group reducing their net-long futures position 226 contracts due to an increase in their short holdings of 5,654 contracts.

Soybeans (new-crop): The November contract closed 2.25cts lower at $10.17 1/2. Weekly stochastics indicate the secondary (intermediate-term) trend remains up. Resistance remains between $10.29 and $10.43 3/4, prices that mark the 33% and 38.2% retracement levels of the previous downtrend from $12.32 through the low of $9.27 1/2. The carry in the November (2015) to January (2016) futures spread closed last week at 5 3/4 cents, still at a neutral to bullish level of total cost of carry. This would indicate that the contract should extend its rally to the 50% retracement level of $10.79 3/4, if not the 61.8% to 67% retracement range between $11.15 3/4 and $11.30 1/2 longer-term.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $6.71, up 26 cents for the week. While the secondary trend remains up, the fact the SR.X posted a sharp sell-off from its test of resistance at $6.17 could be indicating the cash market is establishing a peak. Weekly stochastics remain above 90%, indicating a sharply overbought situation, and nearing a bearish crossover. If the secondary trend does turn down initial support is pegged between $5.57 and $5.48, prices that mark the 33% and 38.2% retracement levels of the ongoing uptrend from $4.25 through last week's high of $6.23.

SRW Wheat (old-crop): The March Chicago contract closed 25.75cts higher at $6.32 1/4 last week. While the secondary (intermediate-term) trend remains up, the March contract fell hard late in the week after testing resistance near $6.67 1/2. This price marks the 67% retracement level of the previous downtrend from $7.76 through the low of $4.80. Weekly stochastics remain above the overbought level of 80% but could dip back below and see a bearish crossover if the market sees follow-through selling this coming week. If so the secondary trend would turn sideways with support pegged between $6.12 and $5.79. These prices mark the 33% and 50% retracement levels of the current secondary uptrend. Support for the major (long-term) uptrend should continue to come from the bullish commercial outlook indicated by the weak carry in the old-crop futures spread and strong national average basis (calculated at 31 cents under, near the 5-year high of 30 cents under). Friday's CFTC Commitments of Traders showed the noncommercial net-long position increased by 15,152 contracts from both short-covering (7,280 contracts) and new buying (7,872 contracts).

SRW Wheat (new-crop): The July Chicago contract closed 26.50cts higher at $6.34 1/4 last week. The secondary (intermediate-term) trend remains up with the July Chicago contract between resistance levels at $6.29 1/4 and $6.73 1/2. These prices mark the 50% and 67% retracement levels of the previous downtrend from $7.62 through the low of $4.96 1/2. Weekly stochastics remain bullish, with additional support coming from the solid uptrend (weakening carry) in the new-crop July to September (Chicago) futures spread. This spread closed Friday at 7 cents, the weakest its carry has been since the week of May 27. Next resistance in the spread is between 3 1/4 cents and 2 1/2 cents.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, December 16.

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