Technically Speaking

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.62, up $0.18 for the week. Weekly stochastics are neutral to bearish, indicating the secondary (intermediate-term) trend remains down. However, the NCI.X looks to be moving into its seasonal rally lasting through the first weekly close of March. If so it could establish a double-top formation near resistance at $3.84, the 50% retracement level of the downtrend from $4.186 through the low of $2.81. The previous high was $3.80 the week of December 22. Despite a rally in the futures market, national average basis firmed 2 cents last week with the NCI.X 24 cents under the close of the March contract. The combination of stronger basis and a rallying futures market reflects increased commercial demand.

Corn (Old-crop): The March contract closed 15.75cts higher at $3.85 3/4 last week. Weekly stochastics are bearish, indicating the secondary (intermediate-term) trend remains down. However, the March contract has been able to rally off its test of support near $3.63 1/2 (posting a low of $3.65 3/4 the week of January 25). Friday's higher close could be the first of a classic three week move against the trend, fitting with the market's seasonal tendency to rally through the first weekly close of March. If so March corn could test resistance near $4.04, a price that marks the 38.2% retracement level of the downtrend from $5.23 through the low of $3.30 1/2, with a move to its previous high of $4.17 less likely. Friday's CFTC Commitments of Traders report showed noncommercial interests reducing their net-long holdings by 40,224 contracts, with an increase of 41,854 contracts in short futures.

Corn (New-crop): The December contract closed 16.00cts higher at $4.16 3/4 last week. Weekly stochastics are bearish indicating the secondary (intermediate-term) trend remains down. However, the contract's 10-year seasonal index shows a tendency for a rally extending through mid-June. Given the neutral view of new-crop fundamentals indicated by the uptrend (weakening carry) in the December 2015 to March 2016 futures spread, Dec corn could see a rally against its downtrend resulting in a test of its previous high of $4.40 (week of December 29). Resistance is between $4.34 and $4.50, prices that mark the 50% and 61.8% retracement levels of the downtrend from $5.04 through the low of $3.64 1/4.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.27, up 14 cents for the week. Weekly stochastics are neutral to bearish, indicating the secondary (intermediate-term) trend remains sideways to down. However, the NSI.X continues to hold above technical support at $9.01, a price that marks the 67% retracement level of the rally from $8.50 through $10.02. The March to May futures spread continues to trend sideways at a neutral level of carry, while national average basis strengthened by about 2 cents last week. Friday's NSI.X was 46 cents under the close of the March futures contract. This support from the commercial side of the market could allow the NSI.X to test minor (short-term) resistance at $9.57. It should also be note that the NSI.X posted a bullish key reversal last week, indicating a possible move back to a secondary uptrend in the coming weeks.

Soybeans (old-crop): The March contract closed 12.50cts higher at $9.73 1/2 last week. Weekly stochastics are neutral to bearish indicating the secondary (intermediate-term) trend remains sideways to down. However, March soybeans closed back above technical support near $9.69 1/2, a price that marks the 67% retracement level of the rally from $9.20 3/4 through the high of $10.66 3/4. Last week's rally could be the start of a move to renew the secondary uptrend that started with the bullish crossover by stochastics the week of October 6, 2014. Given the neutral carry in the old-crop forward curve (March through July contracts), the upside target remains resistance between $10.60 and $11.04. Friday's CFTC Commitments of Traders report showed noncommercial interests decreasing their net-short futures position by 7,241 contracts, with an increase of 9,421 contracts of long futures.

Soybeans (new-crop): The November contract closed 14.25cts higher at $9.60 last week. Weekly stochastics are neutral to bearish indicating the secondary (intermediate-term) trend remains sideways to down. The range of the secondary sideways trend remains wide, with support at the contract low of $9.27 1/2 and resistance near $10.29, the 33% retracement level of the previous downtrend from $12.32 through the contract low. The last major signal by weekly stochastics was a bullish crossover the week of October 6, 2014, meaning the contract could look to renew its seasonal uptrend.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.99, up 26 cents for the week. The SR.X posted a bullish key reversal, trading well outside the previous week's range before closing at its weekly high indicating the secondary (intermediate-term) trend has turned up. Friday's settlement also sets the stage for a possible island reversal if the SR.X posts a breakaway gap next week, in combination with the exhaustion gap between $5.01 and $4.91 left the weeks of January 19 and January 26. National average SRW basis firmed 2 cents last week, with the SR.X priced 28 cents under the close of the March futures contract. Stronger basis combined with the strong uptrend (weakening carry) in the March to May futures spread indicates commercial support could continue to push the cash market higher.

SRW Wheat (old-crop): The March Chicago contract closed 24.25cts higher at $5.27 last week. March Chicago wheat came up just short of establishing two important technical signals last week: 1 cent from trading above the previous week's high, establishing a bullish key reversal; and weekly stochastics a few percentage points away from a bullish crossover below the oversold level of 20%. Despite that Chicago wheat looks more bullish and in position to establish a secondary (intermediate-term) uptrend. The March to May futures spread is in a strong uptrend (weakening carry) reflecting solid commercial support. Friday's CFTC Commitments of Traders report showed noncommercial interests increasing their net-short futures position by 19,288 contracts, though this group was likely covering some of this position late in the week.

SRW Wheat (new-crop): The July Chicago contract closed 19.75cts higher at $5.31 1/4 last week. July Chicago wheat looks to be in the process of moving to a secondary (intermediate-term) uptrend. Last week's action saw the July Chicago establish a double-bottom in conjunction with its contract low of $4.96 1/2 (September 22, 2014) by posting a low of $5.01 before rallying. Weekly stochastics are below the oversold level of 20% and nearing a bullish crossover. Support continues to come from commercial buying, as indicated by the weakening carry in the new-crop (July 2015 to May 2016) forward curve.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, February 3.

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