Technically Speaking

Weekly Analysis: Grain Markets

Darin Newsom
By  Darin Newsom , DTN Senior Analyst
Connect with Darin:
Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.43, down 14 cents for the week. Technical indicators continue to show the secondary (intermediate-term) trend to be sideways-to-up with the NCI.X last week's high of $3.63 a test of resistance at $3.67. This price marks the 50% retraceme4tn level of the sell-off from $4.06 through the low of $3.28. Support is pegged between $3.44 and $3.23, prices that mark the 50% and 67% retracement level of the initial leg of the major (long-term) uptrend from $2.81 (October 2014 low) through $4.06 (July 2015 high).

Corn (Dec futures): The December contract closed 9.75cts higher at $3.77 1/4. Though Dec corn posted a new 4-week high of $3.95 it failed to take out the previous high of $4.02 from the week of August 10. That week was highlighted by a wide range to the low of $3.57 1/2 associated with monthly USDA reports, a range the Dec contract has stayed in since. Technical indicators continue to show the trend is sideways-to-up, though last week's lower close could lead to renewed pressure in the coming weeks. Seasonally the market tends to post its low weekly close at the end of the first week of October.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.18, down 19 cents for the week. The NSI.X continues to move lower, extending both the secondary (intermediate-term) and major (long-term) downtrends. Friday's close put the NSI.X at its lowest level since March 2009, while monthly and weekly stochastics finished in single-digits. Despite this indicating the market is sharply oversold, buyers have shown no interest in the market with national average basis weakening 12 cents to 50cts under the November contract. It needs to be remembered that this type of basis weakness is seasonal, usually bottom out the first weekly close in October at an average of 60 cents under.

Soybeans (Futures): The November contract closed 7.00cts lower at $8.67 1/4. The secondary (intermediate-term) trend is sideways with resistance at the 4-week high (last week's high) of $8.94 1/2 and support at the 4-week low (contract low) of $8.53 1/4. Weekly stochastics are below 20%, indicating the market is in an oversold situation. However, Friday's CFTC Commitments of Traders report showed noncommercial interests continuing to reduce their net-long futures position, this time by 7,768 contracts, adding to pressure coming from the commercial side of the market.

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.28, unchanged for the week. Technical indicators continue to show the secondary (intermediate-term) trend is up. The SR.X continues to rally off its recent low of $4.11, posting a high of $4.44 last week, while weekly stochastics build on the bullish crossover below the oversold level of 20% the week of September 8.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $4.24, unchanged for the week. Similar to the SR.X (see above) technical indicators continue to show the secondary (intermediate-term) trend of the HW.X is up. However, the contract did fall back from last week's high of $4.38.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.60, up 3 cents for the week. Similar to the winter wheat markets (see above) cash HRS wheat looks to be in a secondary (intermediate-term) uptrend following the establishment of a bullish crossover by weekly stochastics the week of September 8. Initial resistance is at last week's high of $4.73, then the previous high of $4.85.

The weekly Commitments of Traders report showed positions held as of Tuesday, September 15.

To track my thoughts on the markets throughout the day, follow me on Twitter: www.twitter.com\DarinNewsom

Comments

To comment, please Log In or Join our Community .