Technically Speaking

Since the recent low made at the end of May, Minneapolis new-crop September wheat futures have rallied close to $1.50 per bushel. While the market is approaching the overbought zone, the breakout above $9.10 should be a positive development. However, just above the market is some very strong chart resistance in the $9.32 to $9.50 area. That should help to at least pause the move higher. On the other side, a rally and close above the $9.50 level would be a bullish development. Early Monday, we are still 25 cents away from that key level.

Weather ahead for both the Canadian Prairies and Northern Plains U.S. wheat belt is hot and dry in the coming week and could be detrimental to spring wheat yield potential. Weather beyond next weekend appears to give a better chance for rain.

August bean oil has been on a meteoric rise, having now rallied over 27 cents per pound just since the end of May. While soybean oil fundamentals remain bullish, with solid crush margins, and demand for biodiesel usage expected to rise, we could see a pause in the recent strength. Further bolstering the bean oil move is the fact that Malaysian palm oil futures reached the highest level since early November 2022.

August bean oil futures are getting overbought with respect to momentum indicators. There is also a divergence in momentum indicators versus flat price, suggesting perhaps we could see another pause or correction to the bullish move.

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

Dana Mantini can be reached at Dana.Mantini@DTN.com

Follow him on Twitter @mantini_r

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