Technically Speaking

Monthly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Futures): The May contract closed at $3.93 1/4, 23 1/4 cents higher on the monthly chart. The major (long-term) trend remains up with initial resistance at the December high of $4.17. A breakout of this level would lead to a test of resistance near $4.43 1/2, a price that marks the 23.6% retracement level of the previous major downtrend from $8.49 (August 2012) through the low of $3.18 1/4 (October 2014). The neutral to bearish carry in the markets forward curve could limit the long-term rally to the 38.2% retracement level of $5.21. The May 2014 high was $5.22 3/4.

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.65, up 21 cents for the month. The major (long-term) trend remains up. Initial resistance is at the December high of $3.80. Beyond that resistance is pegged at $4.90, a price that marks the 38.2% retracement level of the previous major downtrend from $8.26 (August 2012) through the low of $2.81 (October 2014). The April 2014 high was $4.86.

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Soybeans (Futures): The May contract closed at $10.31 3/4, 70 3/4 cents higher on the monthly chart. Monthly stochastics remain neutral below the oversold level of 20%, though the rally in the futures market at the end of February established a secondary bullish crossover, a confirming signal of the major (long-term) uptrend indicated at the end of October 2014. Initial resistance is at the November 2014 high of $10.86 1/4. Given the bullish view of supply and demand indicated by the long-term forward curve, the more active contract should be able to extend the major uptrend to $13.46 1/2, a price that marks the 50% retracement level of the previous major downtrend from $17.89 (September 2012) through the October 2014 low of $9.04.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.84, up 72cts for the month. Though monthly stochastics remain neutral below the oversold level of 20%, the major (long-term) trend is up. Initial resistance is at the November high of $10.08, with the long-term target between $11.49 and $12.99. These prices mark the 33% and 50% retracement levels of the previous major downtrend from $17.48 (high from August 2012) through the October 2014 low of $8.50.

SRW Wheat (Futures): The May Chicago contract closed at $5.13, 10 1/4 cents higher on the monthly chart. The major (long-term) trend remains sideways as the more active futures contract continues to hold above its previous low of $4.66 1/4. Resistance is near $6.26 1/2, a price that marks the 33% retracement level of the previous sell-off from $9.47 1/4 (high from July 2012) through $4.66 1/4 low (September 2014).

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.88, up 18 cents for the month. The major (long-term) trend remains sideways with support at $4.25 (low from September 2014) and resistance at $6.23 (high from December 2014).

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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.

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