Technically Speaking

Chart Analysis: U.S. Grain Futures

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
Connect with Todd:
After a volatile summer of higher corn prices, the technical indicator of 3-month volatility is now falling as it typically does this time of year for corn. It is a good seasonal reminder to reduce expectations for a directional move the next couple months (DTN ProphetX chart).

December corn: Like many grains this time of year, price volatility has been narrowing in December corn and it would not be surprising to see prices trade in a narrow range from now into January as harvest continues to make slow progress. There is still the possibility of a surprise crop estimate waiting in the January WASDE report, but other than that event, prices won't have much to trade on for a while. The fact that noncommercials are largely neutral in corn, holding roughly 32,000 contracts net short as of Nov. 12 also suggests quiet trading ahead. December corn dropped 6 cents last week to a new one-month low. Now at $3.71 1/4, prices are near the middle of where they traded in 2018 when ending stocks were also near 2 billion bushels (bb). The good news is new-crop option premiums should get smaller, as long as prices stay quiet the next couple months, as suspected.

January soybeans: January soybeans lost 12 3/4 cent last week, finishing at $9.18 1/4, high enough to hold above the 100-day average. The post-harvest rally from the September low of $8.65 took prices to the old June high of $9.59 in mid-October. However, prices have faded since as Brazil's rain forecasts began looking more promising for their next crops. There have also been a lot of comments about trade talks with China, but so far, there is no actual agreement to speak of. Technically speaking, prices are contending with resistance after challenging their one-year high and a modest contingent of noncommercial net longs are helping keep prices above their 100-day average for now. The next move in soybeans is not so clear with political decisions playing a big part in where prices go from here.

December KC Wheat: December KC wheat fell 4 1/2 cents last week to $4.17, a bearish finish after briefly posting a new three-month high on Tuesday. Quick rejections of bullish accomplishments like that one are typically bearish signs of a weak market, but in the case of wheat, there were no real expectations of prices becoming too bullish. As with corn, the technical indicator of three-month price volatility is slowly declining, as we would expect for this time of year. The fact that spot KC wheat prices have a 13-year history of support at $4.00 also makes it likely we are in for a winter of roughly sideways trading ranges. On a weekly chart, spot KC wheat prices have resistance at $4.43, the site of the one-year average, but don't forget about long-term support at $4.00.

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

Follow him on Twitter @ToddHultman1

(CZ )


To comment, please Log In or Join our Community .