Technically Speaking

A Multi-Year Perspective: Corn, Soybeans, Wheat

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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Spot soybean futures briefly traded at their lowest price in ten years in 2018, pressured by big crops and a trade dispute with China. So far, $8.00 a bushel has held as support with more challenges ahead in 2019 (DTN ProphetX chart).

Corn: Spot corn futures gained 24-1/4 cents in 2018, ending at $3.75 on Monday. It was the highest end-of-year close in four years, which is not saying much as corn prices are still near their lowest levels in 12 years. Unlike soybeans, corn demand did well in 2018, but prices are still laboring under the weight of six consecutive years of good weather and big harvests. Technically, spot corn prices have shown good support near $3.00 and should at least be able to hold a trading range above $3.00.

Soybeans: Spot soybeans fell 69-1/4 cents in 2018 to $8.82 1/2, the second lowest annual finish in 12 years. Given that U.S. soybean demand was hampered by a 25% Chinese tariff in the second half of 2018, and it looks like the U.S. joined Brazil in achieving record harvests in 2018, soybean prices actually held up fairly well. Recent purchases from China have helped and President Donald Trump said over the weekend that big progress has been made in trade talks, adding to bullish expectations. Technically, it appears soybean prices are still searching for the boundaries of a new, higher trading range after the breakout of 2007 and the expectation of large U.S. ending soybean stocks in 2018-19 remain a bearish concern.

K.C. Wheat: Spot K.C. wheat futures gained 61-1/2 cents in 2018, finishing the year at $4.88 3/4, its highest annual close in four years. Wheat prices found support throughout the year from early drought in the southwestern U.S. Plains, and smaller crops in Russia, Australia and Europe. The reductions helped to reduce wheat supplies outside of the U.S., but have not had much impact yet on U.S. supplies. Technically, K.C. wheat looks similar to corn in that it appears to have found support near $4.00 and looks likely to explore a trading range above $4.00.

Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of commodities or commodity futures involves substantial risk and are not suitable for everyone.

Todd Hultman can be reached at .



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