Technically Speaking

Monthly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.25, down 1 1/2 cents for the month. The major (long-term) trend of the NCI.X remains difficult to classify. The best description could be a long-term sideways trend between the low of $2.81 1/2 (October 2014) and $4.10, a price that marks the 23.6% retracement level of the previous downtrend from $8.26 1/4 (August 2012). Still, the new low (and close) of $2.73 from August 2016 remains a problem.

Corn (Futures): The July contract closed at $3.66 1/2, up 2 1/4 cents on the monthly chart. Similar to the NCI.X (see above), the major (long-term) trend of corn futures could best be classified as sideways with support at the low of $3.18 1/4 (October 2015) and resistance at $4.43 1/2. The latter price marks the 23.6% retracement level of the previous major downtrend from the high of $8.49 ((August 2012). Also as with the NCI.X, corn futures posted a new low of $3.14 3/4 during August 2016, usually a sign of a bearish.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.78 1/2, up 8 cents for the month. The NSI.X is another complicated market with its monthly chart continuing to show a number of conflicting signals regarding the major (long-term) trend. The NSI.X posted a new low for this sell-off of $8.61 3/4 before rallying. Major support is at the low of $8.05 (March 2016).

Soybeans (Futures): The July contract closed at $9.56 1/4, up 10 1/4 cents on the monthly chart. The futures market posted a new 4-mongh low of $9.29 3/4 during April, another major (long-term) bearish signal. Major support remains at the low of $8.44 1/4 (November 2015).

HRW Wheat (Cash): The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $3.41 3/4, up 11 1/4 cents for the month. The bearish reversal in March looks now to be a classic head-fake by wheat, as the cash HRW market remains in a major (long-term) 5-wave uptrend. The April low of $3.13 3/4 was not only a test of support at $3.12 1/4, the 67% retracement level of Wave 1 from $2.79 3/4 (August 2016) through the March 2017 high of $3.78 1/2, but also looks to be the bottom of Wave 2. Wave 3 would still be expected to extend to a test of $4.23 1/2, the 23.6% retracement level of the previous major downtrend.

HRW Wheat (Futures): The July Kansas City contract closed at $4.37 1/4, up 16 3/4 cents for the month. The major (long-term) trend remains up based on the bullish crossover by monthly stochastics below the oversold level of 20% at the end of September 2016. April saw Kansas City futures test the major low $3.95 from August 2016 before the roll from May to July as most active futures allowed the market to rally. Resistance remains at the 4-month high of $4.79 1/4 (March 2017).

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