Technically Speaking

Weekly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.57, down $0.04 for the week. The secondary (intermediate-term) trend remains down with the last signal a bearish crossover by weekly stochastics the week of December 29. The NCI.X fell back from its test of resistance at $3.68, the 67% retracement level of its initial sell-off from $3.80 through the low of $3.44, setting the stage for another test of support at $3.47. This price marks the 33% retracement level of the uptrend from $2.81 through the $3.80 high.

Corn (Old-crop): The May contract closed 5.50cts lower at $3.80 1/2 last week. Weekly stochastics remain bearish indicating the secondary (intermediate-term) trend is down. May corn closed below initial support at $3.82 1/4, the 50% retracement level of the uptrend from $3.39 1/4 through the high of $4.25 1/4. Given the neutral to bearish carry in the May to July futures spread, the May contract should find solid support above the 67% retracement level near $3.68. Friday's weekly CFTC Commitments of Trader report showed noncommercial traders reduced their net-long futures position by another 18,773 contracts, adding 16,082 contracts to their short position.

Corn (New-crop): The December contract closed 6.00cts lower at $4.04 3/4 last week. Weekly stochastics remain bearish indicating the secondary (intermediate-term) trend is down. Given the continued neutral level of carry in the December 2015 to March 2016 futures spread Dec corn should find support between $4.03 1/2 and $3.91 1/2. These prices mark the 50% and 67% retracement levels of the previous uptrend from $3.64 1/4 through the high of $4.40.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.28, down 10 cents for the week. The secondary (intermediate-term) trend remains sideways with support at the recent low of $9.12. However, the last signal established by weekly stochastics was a bullish crossover the week of October 13 indicating the NSI.X should eventually see a move into a stronger uptrend. The upside target remains near $10.98, a price that marks the 38.2% retracement level of the downtrend from $14.97 through the low of $8.50.

Soybeans (old-crop): The May contract closed 11.00cts lower at $9.74 last week. While the secondary (intermediate-term) trend remains sideways, May soybeans are testing trendline support pegged last week near $9.73 1/2. A move below this price could lead to a sell-off back to its previous low of $9.61 3/4, if not the contract low of $9.28 3/4. Weekly stochastics are neutral to bearish, though the last secondary signal remains a bullish crossover below the oversold level of 20% (week of October 6). Soybeans continue to be driven by support from commercial traders, as indicated by the weak carry in both the old-crop and new-crop forward curves, and pressure from noncommercial interests. Friday's CFTC Commitments of Traders report showed the latter group moving back to a net-short futures position of 8,393 contracts by liquidating 15,564 contracts of their long position.

Soybeans (new-crop): The November contract closed 12.00cts lower at $9.53 1/4 last week. Weekly stochastics established a bearish crossover above the oversold level of 20%, indicating the secondary (intermediate-term) trend has turned sideways. The contract has moved through technical support levels and could now target trendline support pegged near $9.44 1/2. While the commercial outlook remains bullish, pressure continues to come from noncommercial selling. A move below trendline support could lead to a test of the previous low of $9.40, then the contract low of $9.27 1/2.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.76, up 20 cents for the week. While there are no clear signals that the secondary (intermediate-term) downtrend has come to an end, last week's rally indicates a possible move to a sideways trend with support at the recent low of $4.55 and resistance at $5.11. The latter marks the 33% retracement level of the downtrend from $6.23 (week of December 15). Weekly stochastics are nearing a bullish crossover below the oversold level of 20%.

SRW Wheat (old-crop): The May Chicago contract closed 19.50cts higher at $5.02 last week. Similar to the SR.X (DTN National SR Wheat Index, national average cash price), the May futures contract looks to be moving into a sideways trend. Support is at the recent low of $4.78 1/4 with resistance at the 4-week high of $5.45. Weekly stochastics are nearing a bullish crossover below the oversold level of 20%.

HRW Wheat (new-crop): The July Kansas City contract closed 16.25cts higher at $5.43 3/4 last week. July Kansas City wheat rallied off its recent low of $5.22 3/4, indicating the secondary (intermediate-term) trend may be turning sideways. If so support is at the low of $5.22 3/4 while resistance remains at the 4-week high of $5.86. Weekly stochastics are nearing a bullish crossover below the oversold level of 20%.

Last Friday's CFTC Commitments of Traders were report showed positions as of Tuesday, March 10.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .