Technically Speaking

Weekly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.27 3/4, down 15 1/2 cents for the week. The secondary (intermediate-term) trend is sideways-to-down after the NCI.X posted a new low near $3.24 last Thursday. This put the NCI.X between support at $3.29 and $3.22, prices that mark the 61.8% and 67% retracement levels of the previous major (long-term) rally from $2.81 1/2 (October 2015) through the high of $4.05 3/4 (July 2015). As mentioned in the monthly analysis from April 1, monthly stochastics are below the oversold level of 20%.

Corn (Old-crop futures): The May contract closed 16.00cts lower at $3.54. Technically it will take time to sort out the reaction to Thursday's government reports, though May corn did post a new contract low of $$3.47 1/4 before closing below the old low of $3.54 1/4. With both daily (short-term) and weekly (intermediate-term) stochastics still above the oversold level of 20% the market could continue to see increased selling interest. Major (long-term) support on the monthly chart remains near $3.50 1/4.

Corn (New-crop futures): The December 2016 contract closed at $3.69 3/4, down 17 1/2 cents for the week. Technically new-crop December corn is similar to old-crop May in that it posted a new contract low of $3.64 last week before closing below its previous low of $3.73 1/4. Also, daily and weekly stochastics remain bearish indicating there is more room for the contract to move lower.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.61 3/4, up 6 1/2 cents for the week. Weekly stochastics have climbed above the overbought level of 80%, indicating the secondary (intermediate-term) uptrend could soon come to an end. Still, the major (long-term) trend is up. It's possible the NSI.X could test its bearish price gap between $8.73 3/4 (high from the week of August 24) and $8.83 3/4 (low from the week of August 17) before turning lower.

Soybeans (Old-crop futures): The May contract closed at $9.18 1/4, up 7 3/4 cents for the week. The secondary (intermediate-term) trend remains up as the contract moved above its previous high of $9.17 1/2 (week of December 6, 2015). With weekly stochastics still below the overbought level of 80%, last week's breakout projects a potential upside target of $9.81 1/2. This price comes from adding the previous sideways range of 64 cents ($9.17 1/2 - $8.53 1/2) to the breakout point ($9.17 1/2). Also, this would put the contract near the spike peak of $9.84 3/4 from the week of August 10, 2015.

Soybeans (New-crop futures): The November 2016 contract closed at $9.32 14, up 9 1/2 cents for the week. The secondary (intermediate-term) trend remains up. Having moved through initial resistance near $9.24 1/4, the 23.6% retracement level of the previous downtrend, next resistance is the 33% retracement level near $9.55. However, weekly stochastics will soon be above the overbought level of 80%.

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.38, up 17 cents for the week. The secondary (intermediate-term) trend is up with an initial target of $4.54 1/2. This price marks the 23.6% retracement level of the previous downtrend from $6.23 through the low of $4.02 1/4.

SRW Wheat (New-crop futures): The July 2016 Chicago contract closed at $4.83, up 12 1/4 cents for the week. The market looks to be in a secondary (intermediate-term) uptrend following last week's bullish outside range. A move to a new 4-week high beyond $4.86 1/2 would confirm this trend. Weekly stochastics remain bullish and well below the overbought level of 80%.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $4.12, up 7 1/2 cents for the week. The secondary (intermediate-term) trend remains up. Initial resistance remains at the 4-week high of $4.24 1/4. Weekly stochastics are bullish, and well below the overbought level of 80%.

HRW Wheat (New-crop futures): The July 2016 Kansas City contract closed at $4.88 1/2, up 5 3/4 cents for the week. The secondary (intermediate-term) trend remains up. While the futures contract posted a bullish outside range last week, it still needs to establish a new 4-week high to indicate a strengthening trend. Weekly stochastics are bullish and still well below the overbought level of 80%.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.79, up 16 cents for the week. The secondary (intermediate-term) trend is up as the SW.X posted a new 4-week high last week. Initial resistance is pegged at $4.97, a price that marks 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 $5.47, up 14 1/2 cents for the week. The secondary (intermediate-term) trend remains up with next resistance at $5.53 1/2. This price marks the 33% retracement level of the previous downtrend from $6.55 through the contract low of $5.02 3/4. The 50% retracement level is up near $5.79.

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