Technically Speaking

Weekly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.47, down 14 cents for the week. Weekly stochastics indicate the secondary (intermediate-term) trend remains down, dating back to the bearish crossover above the overbought level of 80% the week of December 29, 2014. Since then support at $3.47, the 33% retracement level of the previous uptrend from $2.81 through the high of $3.73, has generally held. With weekly stochastics still bearish, a downside breakout of the sideways range between $3.44 (low the week of January 26, 2015) and $3.74 (high the week of March 23) sets the stage for a sell-off to $3.14 (previous low of $3.44-$0.30 trading range), a price that marks the 67% retracement level of the previous uptrend from $2.81 through the high of $3.73.

Corn (Old-crop): The July contract closed 17.00cts lower at $3.69 3/4 last week. The secondary (intermediate-term) trend remains down dating back to the bearish reversal from the week of December 29, 2014. Weekly stochastics are bearish but nearing the oversold level of 20% as July corn closed below price support near $3.74, the 67% retracement level of the previous uptrend from $3.46 3/4 (low the week of September 29, 2014) through the high of $4.31 1/2 (week of December 29). Major (long-term) support on the continuous monthly chart is $3.56.

Corn (New-crop): The December contract closed 15.00cts lower at $3.88 1/4 last week. The secondary (intermediate-term) trend is down with the contract closing below support near $3.91 1/2, a price that marks the 67% retracement level of the previous uptrend from the low of $3.64 1/4 (week of September 29, 2014) through the high of $4.40 (week of December 29). This high week also saw the establishment of a bearish reversal that began the existing downtrend. With weekly stochastics still bearish, next support is pegged at the previous low of $3.64 1/4.

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Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.29, up 2 cents for the week. The secondary (intermediate-term) trend remains sideways with support near $9.12. Initial resistance is near $9.57, the 50% level of the range from the highs near $10.02 through the lows near $9.12.

Soybeans (old-crop): The July contract closed 0.75ct lower at $9.70 3/4 last week. The secondary (intermediate-term) trend remains sideways with minor trendline support calculated at $9.50 this week. Resistance is at $9.97 1/2, the high from the week of March 30. Weekly stochastics established a bullish crossover below 20% last week, indicating potential renewed buying activity. Friday's weekly CFTC Commitments of Traders report showed noncommercial interests reducing their net-short futures position by 26,467 contracts, due in large part to short-covering of 23,059 contracts.

Soybeans (new-crop): The November contract closed 0.25ct lower at $9.52 1/2 last week. The secondary (intermediate-term) trend remains sideways with November beans consolidating between support at $9.27 and trendline resistance calculated next week at $9.57 3/4. Beyond that resistance is at $9.78 3/4 (high from the week of March 30) and $10.04 3/4 (high from the week of March 2).

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.60, down 9 cents for the week. The secondary (intermediate-term) trend remains sideways with support at the recent low of $4.55 and resistance at $5.11. The latter marks the 33% retracement level of the previous downtrend from $6.23 (high the week of December 15, 2014) through the $4.55 low (week of March 2, 2015). Weekly stochastics are neutral with the last signal a bullish crossover below the oversold level of 20% the week of March 16.

SRW Wheat (new-crop): The July Chicago contract closed 0.75cts lower at $4.88 1/2 last week. The secondary (intermediate-term) trend remains sideways with support at the previous low of $4.84 1/2. Resistance is at the previous high of $5.43 3/4 (week of March 23, 2015), creating a range of rough 59 cents. A bearish breakout would suggest an extended sell-off to near $4.25, a test of the June 2010 low of $4.25 1/2. Weekly stochastics are already below the oversold level of 20% indicating renewed buying activity could emerge. Friday's weekly CFTC Commitments of Traders report showed noncommercial interests increasing their net-short futures position by 1,092 contracts.

HRW Wheat (new-crop): The July Kansas City contract closed 7.25cts lower at $5.07 1/2 last week. The secondary (intermediate-term) trend remains down as the contract posted a new low of $5.06 1/4 last week. Major (long-term) support on Kansas City's continuous monthly chart is at $4.53 1/2, the low from September 2009. Last week's action took stochastics below the oversold level of 20%.

The weekly Commitments of Traders report showed positions held as of Tuesday, April 21.

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