Technically Speaking

Weekly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.47, up 4 cents for the week. The NCI.X has held support at its previous low of $3.29, though the recent sell-off left a number of bearish gaps on its weekly chart. Weekly stochastics are neutral-to-bearish, though the last secondary (intermediate-term) signal was a bullish crossover below the oversold level of 20% indicating the secondary trend is still up.

Corn (Old-crop): The September contract closed 1.75cts higher at $3.72 3/4. Sep corn may have stabilized after posting three down weeks against its prevailing secondary (intermediate-term) uptrend (Moves of Three theory). Still, the contract established a new low of $3.65 last week before rallying. Weekly stochastics are neutral to bearish with support at the previous low of $3.52.

Corn (New-crop): The December contract closed 2.50cts higher at $3.83 3/4. Dec corn stabilized last week following the sharp sell-off seen the previous three weeks. The minor (short-term) downtrend on the contract's daily chart looks to have come to an end, possibly moving to an uptrend with a bullish outside day posted last Friday. Weekly stochastics remain neutral-to-bearish though the last secondary signal was a bullish crossover established the week of June 1. Though near key support at its previous low of $3.62 1/2 the contract looks poised for a continued rally.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.66, up 28 cents for the week. Despite the strong rally the secondary (intermediate-term) trend remains sideways. Support is at the recent low of $9.24 while resistance remains near $10.03. Weekly stochastics are neutral with the last secondary signal a bullish crossover below the oversold level of 20% the week of June 1.

Soybeans (Futures): The November contract closed 23.00cts higher at $9.63 1/4 last week. The minor (short-term) trend on the daily chart looks to have turned up after Nov beans tested secondary (intermediate-term) support near $9.31. This price marks the 76.4% retracement level of the previous rally from $8.95 3/4 through the high of $10.45. Last week's rally also established a bullish reversal on the weekly chart and closed a bearish gap between $9.63 1/4 and $9.60. The contract looks to be in position to resume its secondary uptrend, with support coming from continued commercial buying. Last week saw the carry in the November to January futures spread trimmed to 4 3/4 cents. Friday's CFTC Commitments of Traders report showed noncommercial interests reducing their net-long futures position by 4,168 contracts.

Wheat (SRW futures): The September Chicago contract closed at $5.10 1/2, up 11 1/4 cents for the week. The contract posted a bullish reversal on its weekly chart, indicating the minor (short-term) downtrend has come to an end making it possible to rejoin the secondary (intermediate-term) uptrend. The rally in Chicago Sep allowed it to close back above support at $5.04 1/4, a price that marks the 76.4% retracement level of the previous rally from $4.69 1/4 through the high of $6.17 1/2. Buying interest continues to come from commercial traders, as indicated by the carry in the September to December futures spread being trimmed to 5 1/4 cents.

Wheat (HRW futures): The September Kansas City contract closed at $4.93, up 0.75 cent for the week. Last week's rally off a new contract low of $4.81 1/2 could be viewed as a spike reversal. However, continued buying interest will need to be seen this coming week to confirm that the minor (short-term) downtrend has come to an end. Weekly stochastics remain neutral to bearish.

Wheat (HRS futures): The September Minneapolis contract closed at $5.25, up 1 1/2 cents for the week. After posting a new low of $5.11 the September contract was able to rally to a higher close, possibly establishing a spike reversal and reestablishing a secondary (intermediate-term) uptrend. Key will be if the market sees continued buying interest this coming week.

The weekly Commitments of Traders report showed positions held as of Tuesday, August 4.

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DARIN NEWSOM
8/10/2015 | 10:00 AM CDT
Update: On its daily chart, Dec corn is moving up fast toward the bottom end of a bearish price gap between $4.02 and $3.99 1/4 (July 24 and July 27). With the minor (short-term) uptrend gaining momentum it's possible Dec corn could 1) fill the gap 2) close near its session high Monday setting the stage for a possible bullish gap Monday night into Tuesday morning, establishing an island bottom on its daily chart, or 3) fall back on renewed pressure Tuesday. Stay tuned.
DARIN NEWSOM
8/9/2015 | 7:29 PM CDT
Update: Nov soybeans posted a bullish gap at the open of Sunday night's session between Friday's high of $9.64 and the initial overnight low of $9.65 1/4. We'll see if it holds. If so, it would be another bullish secondary (intermediate-term) technical signal for soybeans.