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 $3.38 1/2, up 7 1/2 cents for the week. The secondary (intermediate-term) trend remains sideways with support near $3.29 and initial resistance near $3.49 1/2. Weekly stochastics are neutral above the oversold level of 20%. National average basis strengthened by a 1/2 cent last week with Friday's NCI.X coming in about 26 1/2 cents below the close of the May futures contract. The 5-year average for national average basis last week is 21 cents under with the 10-year average calculated at 23 cents under.

Corn (Old-crop futures): The May contract closed 6.75cts higher at $3.65. The double-bottom between the previous low of $3.54 1/4 (from the week of January 4) and the recent low of $3.54 1/2 remains in place. The secondary (intermediate-term) trend is sideways, though weekly stochastics are growing more bullish. The minor (short-term) trend is up with the next resistance area between $3.66 1/4 and $3.70 1/4, prices that mark the 50% and 67% retracement levels respectively of the previous minor downtrend from $3.78 1/4 through the low of $3.54 1/2.

Corn (New-crop futures): The December 2016 contract closed at $3.82 3/4, up 4 3/4 cents for the week. The secondary (intermediate-term) trend remains sideways with support at the recent contract low of $3.73 1/4. However, the minor (short-term) trend is up with next resistance pegged near $3.84. This price marks the 50% retracement level of the previous minor downtrend from $3.95 through the recent contract low. The 67% retracement level is up at $3.87 3/4.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.43 1/2, 17 cents higher for the week. The secondary (intermediate-term) trend now looks to be up as the NSI.X left a bullish gap between the previous week's high of $8.25 1/2 and last week's low of $8.28 1/2. Also, the NSI.X extended its rally beyond the previous 4-week high of $8.34 3/4. The cash market needs to move above resistance at roughly $8.48 to clearly indicate a bullish breakout. However, weekly stochastics are growing more bearish indicating that could occur in the near future. National average basis weakened slightly last week coming in at about 53 1/4 cents under the close of the May futures contract. The previous week saw national average basis calculated at 53 cents under.

Soybeans (Old-crop futures): The May contract closed at $8.95 3/4, up 17 1/4 cents for the week. The secondary (intermediate-term) trend looks to have turned up with the futures contract moving above the 4-week high of $8.90. Next resistance is the previous high of $9.17 1/2 (week of December 6, 2015). Weekly stochastics are growing more bullish with the latest secondary signal a bullish crossover below the oversold level of 20%. Friday's CFTC Commitments of Traders report showed noncommercial interests reducing their net-short futures position by 35,699 contracts, putting the position at 42,292 contracts.

Soybeans (New-crop futures): The November 2016 contract closed at $9.06 3/4, up 15 3/4 cents for the week. The secondary (intermediate-term) trend is now up as the contract broke out of its sideways patter between $8.98 and $8.68. With weekly stochastics growing more bullish the initial target is now $9.28 (for more information, see the Newsom on the Market column from Friday, March 11).

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.31 1/2, up 15 cents for the week. The secondary (intermediate-term) trend is up, with last week's action building on the bullish crossover below the oversold level of 20% by weekly stochastics the week of February 29. Initial resistance is pegged between $4.55 1/2 and $4.75 3/4, prices that mark the 23.6% and 33% retracement levels of the previous downtrend from $6.23 through thee recent low of $4.02 1/4.

SRW Wheat (New-crop futures): The July 2016 Chicago contract closed at $4.82 3/4, up 16 cents for the week. The secondary (intermediate-term) trend looks to be up as the futures contract posted a new 4-week high. Initial resistance is pegged between $5.16 1/4 and $5.43 1/2, prices that mark the 23.6% and 33% retracement levels of the previous downtrend from the high of $7.32 through the contract low of $4.49 1/2.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $4.18 1/2, up 14 1/4 cents for the week. The secondary (intermediate-term) trend remains up as the HW.X built on the previous week's key bullish reversal. Initial resistance is pegged between $4.45 and $4.69 3/4, prices that mark the 23.6% and 33% retracement levels of the previous downtrend from $6.41 1/2 through the recent low of $3.84 1/4.

HRW Wheat (New-crop futures): The July 2016 Kansas City contract closed at $4.93, up 15 cents for the week. The secondary (intermediate-term) trend now looks to be up as the futures contract moved beyond its previous 4-week high of $4.80. If the contract can clear a pocket of old trade with highs between $5.00 and $5.02, the target area becomes $5.24 1/2 to $5.52. These prices mark the 23.6% and 33% retracement levels of the previous downtrend from $7.42 through the contract low of $4.57 1/4.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.70 1/2, up 13 cents for the week. The market remains a mix of technical signals, though it looks like the secondary (intermediate-term) trend could not be classified as up. The SW.X posted a new 4-week high of last week as momentum (weekly stochastics) continues to grow more bullish. If this continues initial resistance is pegged at $4.97, the 23.6% retracement level of the previous downtrend from $6.67 3/4 through the low of $4.44 1/4.

HRS Wheat (New-crop futures): The September 2016 Minneapolis contract closed at $5.33 1/4, up 18 1/2 for the week. The recently established secondary (intermediate-term) uptrend strengthened last week as the futures contract built on the previous week's bullish key reversal. Initial resistance is at $5.38 3/4, a price that marks the 23.6% retracement level of the previous downtrend from $6.55 through the contract low of $5.02 3/4. The 33% retracement level is up near $5.53 1/2.

*The weekly Commitments of Traders report showed positions held as of Tuesday, March 8.

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