Technically Speaking

A Technical Look at New-Crop Grains

Todd Hultman
By  Todd Hultman , DTN Lead Analyst
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November soybeans fell 31 1/4 cents last week to $12.92 with pressure from recent rains in the western Midwest and from concerns about the closure of river traffic in the aftermath of Hurricane Ida. Over the weekend, the U.S. Coast Guard announced the Lower Mississippi River was open to marine traffic, making the open on Monday evening more interesting. Traders may also be a little cautious ahead of the next WASDE report from USDA, due out Sept. 10. From a short-term technical view, last week's sell-off was bearish as it took prices near their lowest level in two months. From a larger perspective however, we have seen noncommercial long positions go from a peak of 323,798 in late October 2020 to 158,981 as of Aug. 31, while prices have yet to take out the June low of $12.40 1/2. Given this is the time of year when prices typically trade lower into harvest, the support for soybean prices is impressive and corresponds to USDA's view that supplies are apt to remain tight in 2021-22.


December corn closed lower four of the five days last week, finishing down 29 3/4 cents at $5.24, its lowest weekly finish in more than a month. Similar to soybeans, the short-term view is bearish as prices were pressured by late rains and concerns about river traffic in the aftermath of Ida. Monday evening's open for corn will also be interesting after the Mississippi was approved for boat traffic over the weekend. From a technical view, it will be more interesting to see if December corn can hold above the May low of $5.00 as harvest progresses. As with soybeans, speculative long positions in corn have seen a big reduction, down roughly 40% since the peak in January 2021. This week's lower close confirmed the trend is down, but given all the recent bearish pressures, prices still have a chance to hold support above $5.00.


During a week that saw double-digit losses in corn and soybeans, December KC wheat lost just a penny, ending Friday at $7.23. While corn and soybeans are showing signs of harvest pressure, December KC wheat is holding up well, trading above its 100-day average at $6.73. Adverse weather in 2021 took a bite out of wheat production in the U.S., Canada and Russia, putting supplies at multi-year lows. Technically, December KC wheat prices have been choppy this year, but started another uptrend in late July and are now above $7.00, among its highest prices since 2014. With USDA's lower estimate of world wheat supplies for 2021-22, prices are apt to stay well supported into early 2022.

Comments above are for educational purposes only and are not meant as specific trade recommendations. The buying and selling of grain or grain futures or options involve substantial risk and are not suitable for everyone.

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