Technically Speaking

Weekly Analysis: Grain Markets

By Darin Newsom , DTN Senior Analyst
Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.48 1/2, up 1 3/4 cents for the week. The NCI.X looks to have established a secondary (intermediate-term) trend, holding above its recent bullish breakaway gap and moving to a new 4-week high last Friday. Weekly stochastics are also growing more bullish. Initial resistance is pegged near $3.53 1/2, the 33% retracement level of the previous downtrend from $4.05 3/4 through the recent low of $3.27 1/4.

Corn (Old-crop futures): The March contract closed 1.75cts higher at $3.72. The futures contract posted a new 4-week high last Friday of $3.72 1/2, indicating the secondary (intermediate-term) trend has finally turned up. Seasonally the market tends to rally during February, gaining 4% on both its 5-year and 10-year seasonal indexes. Weekly stochastics are bullish above the oversold level of 20%.

Corn (New-crop futures): The December 2016 contract closed at $3.92, up 1 1/4 cents for the week. Dec corn looks to have established a secondary (intermediate-term) uptrend with a move to a new 4-week high of $3.94 last week. The next upside target is the previous set of highs at $4.03 1/2. Weekly stochastics are growing more bullish above the oversold level of 20%.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.35 1/2, up 4 1/2 cents for the week. Technically the NSI.X looks set to begin a secondary (intermediate-term) uptrend, but needs a move to a new 4-week high to confirm. Last week came close with the high of $8.37 1/2 a mere 1/4 cent below the previous week's high of $8.37 3/4. A failure to move to a new high could lead to a test of the low side of the sideways trend at $8.08 1/2. Weekly stochastics remain bullish above the oversold level of 20%.

Soybeans (Old-crop futures): The March contract closed 5.75cts higher at $8.82 1/4. Both the secondary (intermediate-term) and minor (short-term)) trends remain sideways. However, the contract looks to have regained short-term bullish momentum that could lead to a test of minor resistance at $8.91 3/4 on its daily chart. This price marks the 67% retracement level of the previous downtrend from $9.11 1/2 through the low of $8.52.

Soybeans (New-crop futures): The November 2016 contract closed 9.25cts higher at $8.93. The secondary (intermediate-term) trend looks to have turned up as the contract posted a new 4-week high of $8.96 1/4. With weekly stochastics bullish a test of initial resistance at $9.24 1/4 is possible. This price marks the 23.6% retracement level of the previous downtrend from $11.65 through the contract low of $8.50.

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.37 1/4, up 4 1/2 cents for the week. The secondary (intermediate-term) trend remains up with the SR.X posting a new 4-week high of $4.43. The initial upside price target remains $4.61, the 23.6% retracement level of the previous downtrend from $6.23 through the low of $4.10 3/4.

SRW Wheat (New-crop futures): The July 2016 Chicago contract closed 5 1/4cts higher at $4.90 1/2. The secondary (intermediate-term) trend remains up. Initial resistance is at the previous high of $5.10 1/4.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $4.14 1/4, up 2 cents for the week. The secondary (intermediate-term) trend remains up. Initial resistance remains at the 4-week high of $4.21 3/4. Support is at the 4-week low of $3.95 1/4.

HRW Wheat (New-crop futures): The July 2016 Kansas City contract closed 1.50cts higher at $4.92 1/4. The secondary (intermediate-term) trend remains up with initial resistance is at the 4-week high of $5.02. Weekly stochastics are bullish above the oversold level of 20%.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.77, up 4 cents for the week. The secondary (intermediate-term) trend is sideways with the SW.X holding near support at $4.73. Resistance remains at the previous high of $5.02.

HRS Wheat (New-crop futures): The September 2016 Minneapolis contract closed 2.75cts higher at $5.21 3/4. The secondary (intermediate-term) trend remains sideways with support at the double-bottom contract low of $5.15 1/4. Resistance is at the 4-week high of $5.33 1/4. A bearish breakout would suggest an extended sell-off to $4.97 1/4. A bullish breakout would put the upside target at $5.51 1/4.

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