Technically Speaking

Monthly Analysis: Grain Markets

Darin Newsom
By  Darin Newsom , DTN Senior Analyst
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Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI.X, national average cash price) closed at $3.10, up 2 cents for the month. The major (long-term) trend remains sideways-to-down. The last three long-term highs have been lower, as have the last two major lows. This would suggest that the August 2016 low of $2.73 is a long-term target. It's interesting to note that the September range for the NCI.X was only 11 1/4 cents between $3.15 and $3.03 3/4.

Corn (Futures): The December contract closed at $3.55 1/4, down 2 1/2 cents on the monthly chart. The major (long-term trend remains sideways-to-down. As with cash corn, the last three major highs have been successively lower ($4.54 1/4, $4.39 1/4, $4.17 1/4) while the interim lows ($3.18 1/4, $3.14 3/4) have also been lower. This would suggest a new low could be printed in 2018. Also like the NCI.X, corn futures posted an extraordinarily small trading range in September of only 16 1/2 cents between $3.62 and $3.45 1/2.

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Soybeans (Cash): The DTN National Soybean Index (NSI.X, national average cash price) closed at $8.89 1/2, up 7 3/4 cents for the month. While indications are the major (long-term) trend of the NSI.X would still be classified as up, the market continues to consolidate within a narrowing range of trendline support and the November 2016 high monthly close of $9.06. Trendline support in October 2017 is at $8.65.

Soybeans (Futures): The November contract closed at $9.68 1/4, up 23 cents on the monthly chart. It's interesting to note that the downtrend line connecting the major (long-term) highs of $17.89 (September 2012) and $15.36 3/4 (May 2014) continues to hold rallies, this time the July 2017 spike to $10.47. If the June 2017 low of $9.00 1/4 is taken out the futures market could test the November 2015 low of $8.44 1/4.

HRW Wheat (Cash): The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $3.66 1/4, up 19 3/4 cents for the month. Cash HRW wheat remains in a major (long-term) uptrend. The market has generally held trendline support connecting the lows from August 2016 ($2.79 3/4) to April 2017 ($3.15 3/4). The sell-off seen from the July 2017 high of $4.97 3/4 to the August 2017 low of $3.32 was a retracement of the rally from the August 2016 low through July 2017 high. It would not be surprising to see the HW.X consolidate for a couple months before rebuilding bullish momentum.

HRW Wheat (Futures): The December Kansas City (HRW) contract closed at $4.42 3/4, up 6 1/2 cents for the month. The market's major (long-term) trend remains up. However, monthly stochastics are bearish above the oversold level of 20% indicating the market could be in a consolidation phase as it tries to rebuild bullish momentum.

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