Technically Speaking

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.80, up 4 cents for the week. The secondary (intermediate-term) trend remains up. However the NCI.X is testing its next target of $3.84, a price that marks the 50% retracement level of the previous downtrend from $4.86 through the low of $2.81, in conjunction with weekly stochastics calculated in the upper 90% range (indicating a sharply overbought market). This combination could lead to a turn to a secondary downtrend in the near future. If so support is pegged between $3.47 and $3.31, the 33% and 50% retracement levels of the current uptrend.

Corn (Old-crop): The March contract closed 4.25cts higher at $4.14 3/4. The secondary (intermediate-term) trend remains up with the March contract posting a new high (for this move) of $4.15 3/4. The contract remains in a technical no-man's land between resistance at $4.04 and $4.26 3/4, prices that mark the 38.2% and 50% retracement levels of the previous downtrend from $5.23 through the low of $3.30 1/2. The neutral to bearish level of carry in the old-crop (2014-2015) forward curve would indicate the market should establish a top in this range (no-man's land), an idea confirmed by weekly stochastics finishing last week well above 90% indicating a sharply overbought situation.

Corn (New-crop): The December contract closed 4.00cts higher at $4.39. The secondary (intermediate-term) trend remains up with the December contract closing above technical resistance near $4.13 1/4. This price marks the 50% retracement level of the previous downtrend from $5.04 through the low of $3.64 1/4. Next resistance is pegged between $4.50 1/2 and $4.57 1/2, prices that mark the 61.8% and 67% retracement levels. Weekly stochastics are well above 90% indicating the contract is sharply overbought, possibly leading to the establishment of a secondary downtrend in the weeks ahead.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.97, up 15 cents for the week. Weekly chart for the NSI.X is showing different trend signals with its bar chart showing a sideways pattern, it continues to hold above support at $9.56 but below the recent high of $10.08, while weekly stochastics indicate the secondary trend remains up. Combining the two would indicate the NSI.X should see a bullish breakout (a move above the recent high) that would establish a next target price near $10.60 (Sideways range = $0.52 ($10.08 - $9.56), using that range: $10.08 + $0.52 = $10.60). Such a move would result in test of next resistance pegged at $10.66, the 33% retracement level of the previous downtrend from $14.97 through the low of $8.50. This peak should coincide with weekly stochastics climbing above the overbought level of 80%.

Soybeans (old-crop): The March contract closed 15.50cts higher at $10.54. Similar to the NSI.X, weekly charts for the March contract show different trend indicators. Its bar chart shows a sideways pattern with support near $10.25 1/4 and resistance near $10.60 3/4, the latter the 38.2% retracement level of the previous downtrend from $12.87 1/2 through the low of $9.20 3/4. Weekly stochastics indicate the market should resume its uptrend, with the neutral level of carry in the old-crop forward curve (2014-2105 contracts) putting the next target price at the 50% retracement level near $11.04.

Soybeans (new-crop): The November contract closed 11.50cts higher at $10.29. Weekly stochastics indicate the secondary (intermediate-term) trend remains up as the November contract tests resistance between $10.29 and $10.43 3/4, prices that mark the 33% and 38.2% retracement levels of the previous downtrend from $12.32 through the low of $9.27 1/2. An extension of the uptrend could result in a test of resistance at the 50% retracement level of $10.79 3/4. The weak carry in the new-crop (2015-2016) forward curve continues to indicate a bullish long-term commercial outlook.

Wheat (Cash): The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $5.77, down 24 cents for the week. Following the recent test of resistance at $6.17, a price that marks the 67% retracement level of the previous downtrend from $7.11 through the low of $4.25, weekly stochastics now show the secondary (intermediate-term) trend is down. This past week saw weekly stochastics establish a bearish crossover (faster moving line crossing below the slower moving line) above the overbought level of 80%. Initial support is pegged between $5.57 and $5.48, the 33% and 38.2% retracement levels of the uptrend from the $4.25 low through the high of $6.23 (week of December 15). Beyond that support might be found at the 50% retracement level of $5.24.

SRW Wheat (old-crop): The March Chicago contract closed 21.50cts lower at $6.10 3/4 last week. As discussed in last week's analysis, the possibility of a turn to a sideways trend appears to have materialized with the contract's lower weekly close. Weekly stochastics established a bearish crossover (faster moving line moving below the slower moving line), but below the overbought level of 80%. This would imply that a period of consolidation, likely in the range of of $6.12 and $5.79 1/2 (the 33% and 50% retracement levels of the uptrend from $4.80 through the recent high of $6.77), before the trend turns up again with resistance still pegged near $6.77 1/2. This price marks the 67% retracement level of the previous downtrend from $7.76 through the $4.80 low.

SRW Wheat (new-crop): The July Chicago contract closed 17.75cts lower at $6.16 1/2 last week. The secondary (intermediate-term) trend has turned sideways after weekly stochastics established a bearish crossover (faster moving line crossing below the slower moving line) below the overbought level of 80%. Initial support is near $6.09 1/2, a price that marks the 50% retracement of the uptrend from $4.96 1/2 through the recent (week of December 15) high of $6.66. The trend of the new-crop July to September futures spread remains up (weakening carry) reflecting a more bullish view of new-crop supply and demand. This should continue to provide support to the market, limiting the sell-off to no more than the 50% retracement level of $5.81 1/4.

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