Technically Speaking

Weekly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.41, up 2 cents for the week. The secondary (intermediate-term) trend remains sideways with the NCI.X continuing to hold above major (long-term) support at $3.31. The minor (short-term) daily chart continues to show the NCI.X is in Wave 2 of a 5-wave uptrend, with initial support between $3.41 and $3.39. These prices mark the 38.2% and 50% retracement levels of the Wave 1 rally from $3.32 through the high of $3.47. Support at the 61.8% retracement level is down at $3.38.

Corn (Old-crop): The September contract closed 1.25cts higher at $3.65 1/4. While the secondary (intermediate-term) trend in Sep corn looks sideways, technical indicators continue to show mixed signals. Resistance and support remains at the previous week's range from $3.91 1/2 to $3.46 1/2 while weekly stochastics are neutral-to-bearish. Similar to cash corn, the Sep futures contract looks to be in Wave 2 of a minor (short-term) 5-wave uptrend on its daily chart with initial support near $3.64 1/2. However, as a Wave 2 Sep corn could pull back to support between $3.56 and $3.53 1/2.

Corn (New-crop): The December contract closed 1.75cts higher at $3.77 1/4. The December contract should continue to consolidate between $4.02 and $3.57 1/2, the trading range for the week of August 10. The daily chart shows the contract to be moving into Wave 2 of a 5-wave minor (short-term) uptrend with initial support near $3.75 1/4. This price marks the 33% retracement level of Wave 1 from $3.57 1/2 through last Friday's high of $3.84 1/4. Friday also saw the contract post a minor bearish reversal, indicating Wave 2 could possibly extend to the 67% retracement level near $3.66 1/2.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.84, down 32 cents for the week. Technical indicators continue to show the secondary (intermediate-term) and major (long-term) trends are sideways between the extended range from near $10.03 through last October's low of $8.50. However, the minor (short-term) trend on the daily chart remains down indicating the NSI.X should continue to move lower.

Soybeans (Futures): The November contract closed 27.00cts lower at $8.89 1/2. November soybeans moved to a new low of $8.88 indicating both the secondary (intermediate-term) and major (long-term) trends are down. Commercial support, indicated by the uptrend (weakening carry) in the November to January futures spread, continues to be overwhelmed by noncommercial selling. Friday's weekly CFTC Commitments of Traders report showed this group reducing their net-long futures position by 36,807 contracts. Next major support is at the October 2009 low of $8.78 3/4.

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.42, down 8 cents for the week. The SR.X looks to be in a secondary (intermediate-term) sideways trend, consolidating between $4.72 and $4.37. This is the price range from the week of August 10. Weekly stochastics are below 20% indicating the cash market is oversold and nearing a possible bullish turn.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $4.28, down 17 cents for the week. The move to a new low ($4.28) extended both the secondary (intermediate-term) and major (long-term) downtrends. Next major support on the monthly chart is at the June 2010 low of $3.42. However, monthly and weekly stochastics are well below 20% indicating the cash HRW market is sharply oversold.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.55, down 15 cents for the week. The move to a new low of $4.55 extended both the secondary (intermediate-term) and major (long-term) downtrends. Next major support on the monthly chart is pegged at the September 2009 low of $4.45. Weekly and monthly stochastics are below the oversold level of 20% indicating the cash market is sharply oversold.

The weekly Commitments of Traders report showed positions held as of Tuesday, August 18.

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