Technically Speaking

Weekly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.43, down 13 3/4 cents for the week. The secondary (intermediate-term) trend is sideways, though weekly technical indicators remain a complicated mix. For now resistance remains near $3.59 1/2 while support is near $3.23. The NCI.X most recently tested resistance with a spike high of $3.64 1/4 the week of April 18. The next move could be a test of support.

Corn (Old-crop futures): The July contract closed 14.25cts lower at $3.77 1/2. The secondary (intermediate-term) trend looks to be sideways with a range of $3.51 1/4 (contract low) to $4.07 1/4 (high the week of April 18). The latter was also a test of resistance at $4.11 1/4, a price that marks the 50% retracement level of the previous downtrend from $4.71 1/4 through contract low. The minor (short-term) trend remains down with support pegged at $3.70. Daily stochastics are nearing the oversold level of 20%.

Corn (New-crop futures): The December 2016 contract closed 10 1/2 cents lower at $3.84 3/4. The secondary (intermediate-term) trend remains sideways with a range of $3.64 (contract low) to $4.09 (high the week of April 18). The latter was also a test of resistance near $4.13, a price that marks the 23.6% retracement level of the previous downtrend. The minor (short-term) trend remains down with support at $3.79. Daily stochastics are nearing the oversold level of 20%.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.62 1/2, up 5 1/2 cents for the week. While the secondary (intermediate-term) trend remains up, weekly stochastics indicate the NSI.X is overbought as it tests resistance at $9.71 1/4 (last week's high was $9.72 3/4). This leave cash soybeans vulnerable to the establishment of a secondary downtrend in the near future, possibly as soon as this week. National average basis of about 72 1/4 cents under (the July futures contract) remains well below both the 5-year (17 1/2 cents under) and 10-year (40 cents under) averages.

Soybeans (Old-crop futures): The July contract closed at $10.34 3/4, up 5 cents for the week. While the secondary (intermediate-term) trend remains up, weekly stochastics are above the overbought level of 80% and nearing a possible bearish crossover. The July contract's recent high of $10.57 could be considered a test of initial major (long-term) resistance at $10.67 1/4, a price that marks the 23.6% retracement level of the previous downtrend from $17.89 through the low of $8.44 1/4. Friday's weekly CFTC Commitments of Traders report* showed noncommercial interests adding 12,444 contracts to their net-long futures position.

Soybeans (New-crop futures): The November 2016 contract closed at $10.22, up 14 1/4 cents for the week. The secondary (intermediate-term) trend remains up. However, with weekly stochastics above the overbought level of 80% the contract is testing resistance between $10.07 1/2 and $10.44 3/4. These prices mark the 50% and 61.8% retracement levels of the previous downtrend. Support continues to come not only from increased noncommercial buying but commercial interest as well, as indicated by the weak carry in the November-to-January futures spread.

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $4.16 1/2, down 22 3/4 cents for the week. The secondary (intermediate-term) trend remains sideways in a wide range between its major low of $4.02 1/4 and the recent high of $4.63. The latter was a test of resistance between $4.54 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 the major low.

SRW Wheat (New-crop futures): The July 2016 Chicago contract closed at $4.63 3/4, down 24 3/4 cents for the week. The secondary (intermediate-term) trend remains sideways. However, the minor (short-term) downtrend looks to be nearing its end with daily stochastics below the oversold level of 20%. Major support is at 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 $3.83, down 20 1/4 cents for the week. The secondary (intermediate-term) trend remains sideways with a wide range of $4.29 (4-week high) and $3.78 1/4 (major low).

HRW Wheat (New-crop futures): The July 2016 Kansas City contract closed at $4.53 1/2, down 25 cents for the week. The secondary (intermediate-term) trend is sideways-to-down as the contract posted a new low of $4.50 1/2 last week. Major support is pegged at the April 2016 low of $4.42 1/2.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.79 3/4, down 12 1/4 cents for the week. The secondary (intermediate-term) trend looks to be sideways between resistance at $4.97 and support at the 4-week low of $4.61 1/2.

HRS Wheat (New-crop futures): The September 2016 Minneapolis contract closed at $5.42 3/4, down 12 1/4 cents for the week. The secondary (intermediate-term) trend remains up though the futures contract continues in a consolidation phase. Resistance remains at $5.53 1/2, the 33% retracement level of the previous downtrend from $6.55 through the contract low of $5.02 3/4. Weekly stochastics are below the overbought level of 80%.

*The weekly Commitments of Traders report showed positions held as of Tuesday, May 3.

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