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 $3.35 1/4, down 7 cents for the week. The market's minor (short-term) downtrend has the NCI.X testing support near $3.34 1/4, the 67% retracement level of its previous minor uptrend from $3.27 1/4 through the high of $3.48 1/2. Daily stochastics are well below the oversold level of 20% and could establish a bullish crossover in the near future. The secondary (intermediate-term) trend has turned sideways, as is the major (long-term) trend. National average basis is also trending sideways with the DTN National Corn Index calculated Friday at $3.35 1/4, 23 1/2 cents under the close of the March futures contract.

Corn (Old-crop futures): The March contract closed 7.00cts lower at $3.58 3/4. The minor (short-term) downtrend appears to be nearing its end as the contract tests support near $3.56 3/4, a price that marks the 67% retracement level of the previous minor uptrend from $3.48 1/2 through the high of $3.73 3/4. Also, daily stochastics are below the oversold level of 20% setting the stage for a potential bullish crossover. As for the weekly chart, the secondary (intermediate-term) trend has turned sideways again. Last Friday's weekly CFTC Commitments of Traders report* showed noncommercial interests switching back to a net-short futures position of 14,999 contracts. Combined with short-term technical signals, this could lead to a minor uptrend based on noncommercial short-covering.

Corn (New-crop futures): The December 2016 contract closed at $3.81 3/4, down 7 1/2 cents for the week. As with March corn, the minor (short-term) downtrend for new-crop December could soon come to an end. The contract is testing minor support near $3.81 1/4 while daily stochastics have moved below the oversold level of 20%. With noncommercial traders now holding a net-short futures position in corn, the move to a minor uptrend could be the result of noncommercial short-covering.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.24 1/2, up 4 1/4 cents for the week. The secondary (intermediate-term) trend remains sideways between resistance near $8.48 and support at the major (long-term) low of $8.08 1/2. Weekly stochastics are neutral-to-bearish above the oversold level of 20%. National average basis weakened by another 1 cent last week with the DTN National Soybean Index calculated at $8.24 1/2 Friday, 48 1/4 cents under the close of the March futures contract.

Soybeans (Old-crop futures): The March contract closed 5.25cts higher at $8.72 3/4. The secondary (intermediate-term) trend remains sideways with trendline support pegged this week at $8.57 and resistance at $8.93 1/4. The minor (short-term) trend is also sideways with support near $8.64 and initial resistance at the 20-day moving average calculated near $8.75. Beyond that resistance remains at $8.81 3/4.

Soybeans (New-crop futures): The November 2016 contract closed 2.75cts higher at $8.86. The secondary (intermediate-term) trend looks to be sideways with support near $8.75 1/2 and initial resistance the 4-week high of $8.98.

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.17, down 8 1/4 cents for the week. Cash SRW extended its secondary (intermediate-term) sell-off last week, moving toward a test of the major low of $4.10 3/4. Weekly stochastics have moved back below the oversold level of 20%.

SRW Wheat (New-crop futures): The July 2016 Chicago contract closed 8 cents lower at $4.67 3/4. The secondary (intermediate-term) trend turned down again as the contract posted a new low of $4.64 1/2 last week. Weekly stochastics are below the oversold level of 20%.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $3.87, down 10 1/4 cents for the week. The secondary (intermediate-term) trend turned down with last week's move below the major (long-term) low near $3.95 1/4. Cash HRW remains at the lowest price it has been since July 2010.

HRW Wheat (New-crop futures): The July 2016 Kansas City contract closed 18.50cts lower at $4.64 1/2 last week. The secondary (intermediate-term) trend is down as the July KC wheat posted a new contract low of $4.61 3/4. Weekly stochastics remain below the oversold level of 20%.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.59, down 7 cents for the week. The secondary (intermediate-term) trend is down. Initial support is at the previous low of $4.56, then the major (long-term) low of $4.44.

HRS Wheat (New-crop futures): The September 2016 Minneapolis contract closed 8.50cts lower at $5.05 3/4. The secondary (intermediate-term) trend remains down as Sep Minneapolis wheat posted a new contract low of $5.05. However, weekly stochastics continue to show the contract is sharply oversold and vulnerable to renewed buying interest.

*The weekly Commitments of Traders report showed positions held as of Tuesday, February 9.

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