Technically Speaking

Weekly Analysis: Grain Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $2.87 3/4, up 2 1/2 cents for the week. The NCI.X posted a spike reversal last week, falling to a new major (long-term) low of $2.73 before rallying to a higher weekly close. This move also established a bullish crossover by weekly stochastics, confirming the move to a secondary (intermediate-term) uptrend. The initial upside target is near $3.03, a price that marks the 23.6% retracement level of the previous downtrend from $4.00 1/2 through last week's low.

Corn (Futures): The December contract closed 3.50cts higher at $3.28 1/2. The market looks to be at or near a bullish turn for its secondary (intermediate-term) trend. The fall to a new major (long-term) low of $3.14 3/4 followed by a higher weekly close looks to be a spike reversal, though no bullish crossover was established by weekly stochastics. If the secondary trend has turned up, initial resistance is pegged near $3.46 1/2, a price that marks the 23.6% retracement level of the previous downtrend from $4.49 through last week's low.

Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $9.15, down 22 1/2 cents for the week. The secondary (intermediate-term) downtrend looks to be nearing its end. The NSI.X is testing support at $9.07 1/4, a price that marks the 67% retracement level of the previous uptrend from $8.05 through the high of $11.12, while weekly stochastics sit well below the oversold level of 20%. Also, last week's action left an exhaustion gap between the previous week's low of $9.37 1/2 and last week's high of $9.32 1/4 setting the stage for a possible island bottom in the near future.

Soybeans (Futures): The November contract closed at $9.52 1/2, down 14 3/4 cents for the week. The secondary (intermediate-term) trend remains down. However, the market could be nearing a turn with weekly stochastics well below the oversold level of 20% as the futures contract holds above support at $9.29 1/4. This price marks the 76.4% retracement level of the previous uptrend from $8.50 (week of September 8, 2015) through the high of $11.86 1/4 (week of June 20).

SRW Wheat (Cash): The DTN SRW Wheat National Index (SR.X, national average cash price) closed at $3.45, down 4 3/4 cents for the week. After gapping lower and posting a new major (long-term) low of $3.31 3/4 last week, the SR.X closed at its weekly high. With stochastics well below the oversold level of 20%, indicating cash SRW is sharply oversold, the SR.X is in position to establish an island bottom if it can gap higher this coming week.

HRW Wheat (Cash): The DTN HRW Wheat National Index (HW.X, national average cash price) closed at $2.98 1/4, up 1 cent for the week. After posting a new major (long-term) low of $2.79 3/4 last week the HW.X was able to close higher. This now looks like a bullish spike reversal that in conjunction with the bullish crossover by weekly stochastics, indicates the secondary (intermediate-term) trend has turned up.

HRS Wheat (Cash): The DTN HRS Wheat National Index (SW.X, national average cash price) closed at $4.35, down 2 cents for the week. Last week's low of $4.30 could be viewed as a double-bottom with the previous low of $4.30 1/4 from the week of July 18. The SW.X closed at its weekly high, setting the stage for a possible bullish island reversal if it can gap higher this coming week.

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