Technically Speaking

Chart Analysis: US Cash Grain Prices

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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DTN's index of cash corn prices reversed dramatically higher in May, punishing bearish noncommercials and funds while planting concerns hang on longer than expected. (DTN ProphetX chart)

Corn: The last time this space looked at corn prices was May 13 and July corn had just made a new contract low, pressured by heavy noncommercial and fund selling in the face of growing planting concerns. Since then, corn prices have taken a bullish turn with DTN's National Corn Index resting at $4.00 a bushel (bu) as of Friday, May 31, near its highest price in four years. I've written before about how corn prices tend to get more volatile in May, often trading in the opposite direction of the first four months, and that looks true again this year. This is the time of year when seasonal highs are usually seen for corn, but not knowing yet how corn plantings will turn out, prices still have potential to trade higher and are showing no sign of a top just yet.

Soybeans: DTN's National Soybean Index gained 48 cents last week, finishing at $7.96, which is back near its one-year average. Fundamentally, the rally was related to growing concerns about how soybean planting might go in 2019, and caught bearish noncommercials heavily short and off guard. It is difficult to understand how soybean prices can go much higher when ending supplies are near 1 billion bushels (bb) and talks aren't going well with China. Technically, however, the weekly stochastic turned higher and influence from higher corn prices could help bring more punishment to bearish speculators. This latest rally could have some more in it but remains fundamentally suspicious.

KC wheat: DTN's National HRW Wheat Index surged 83 cents higher the past three weeks, finishing Friday at $4.55 bu. The low was marked by noncommercial selling and a gloomy bearish sentiment about facing the possibility of another year of ending U.S. wheat supplies near or above 1 bb again. The rally was identified early by a higher turn in the weekly stochastic as corn's rally helped wheat prices catch fire. Late-season rain and flooding in Kansas and Oklahoma have also added to bullish concerns about wheat prices. From here, prices may find resistance at the one-year average of $4.64, or possibly at the 2019 high of $4.91. So far, world crop conditions show some limited concerns of dryness but are generally favorable early in 2019.

Comments above are for educational purposes and are not meant to be specific trade recommendations. The buying and selling of grains and grain futures involve substantial risk and are not suitable for everyone.

Todd Hultman can be reached at

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