Technically Speaking

Monthly Analysis: Grain Markets

Cash corn, corn futures, and cash soybeans all pulled off "Papillon's Escape" at the end of June. (Source: DTN ProphetX)

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.89, up 56 cents for the month. The NCI.X confirmed it has moved into Wave 3 of a 5-Wave uptrend (Elliott) with a move above its Wave 1 peak of $3.80 (December 2014). Just for good measure, the NCI.X also established a bullish reversal after establishing a new low of $3.29 for Wave 2. Initial resistance is pegged at $4.10, the 23.6% retracement level of the previous downtrend from $8.26 through the October 2014 low of $2.81. The long-term upside price target is between $4.63 and $4.90.

Corn (Futures): The December contract closed at $4.31 1/2, up 80 cents on the monthly chart. The strong rally at the end of the month confirmed the corn market has moved into Wave 3 of a 5-Wave (Elliott) major (long-term) uptrend. Not only did futures establish a bullish reversal, bringing an end to Wave 2, it also moved through the Wave 1 peak of $4.17 posted during December 2014. The initial upside price target is $5.21, the 33% retracement level of the previous downtrend from $8.49 through $3.18 1/4.

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Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $10.12, up $1.11 for the month. The NSI.X moved into Wave 3 of its major (long-term) 5-Wave uptrend (Elliott), closing above its Wave 1 peak of $10.08. The initial upside target is between $11.49 and $11.93, prices that mark the 33% and 38.2% retracement levels of the previous downtrend from $17.48 through the low of $8.50.

Soybeans (Futures): The November contract closed at $10.37 1/4, up $1.03 1/4 on the monthly chart. Though not confirming a move to Wave 3 of a major (long-term) 5-Wave uptrend (Elliott), soybean futures posted a strong rally at the end of June. The initial target remains the Wave 1 peak of $10.86 1/4 posted in November 2014. Assuming an eventual bullish breakout the initial upside target is near $11.98 3/4, a price that marks the 33% retracement level of the previous downtrend from $17.89 through the low of $9.04.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $5.80 up $1.27 cents for the month. The major (long-term) trend has turned up, confirming a possible double-bottom formation between the September 2014 low of $4.25 and the May 2015 low of $4.38. Initial resistance is near $6.00, a price that marks the 33% retracement level of the previous major downtrend from $11.86 through the low of $3.12. Monthly stochastics are bullish.

SRW Wheat (Futures): The September Chicago contract closed at $6.15 3/4 up $1.38 3/4 on the monthly chart. The major (long-term) trend looks to have turned up with the strong rally at the end of the month. Initial resistance is pegged near $6.26 1/2, with longer-term resistance up at $7.33 1/4.

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