Technically Speaking

Weekly Analysis: Corn and Soybean Markets

Source: DTN ProphetX

Corn (Cash): The DTN National Corn Index (NCI, national average cash price) closed at $3.70, up 11 cents for the week. The NCI extended its secondary (intermediate-term) uptrend last week. Next resistance is at $7.73, a price that marks the 76.4% retracement level of the sell-off from $4.01 (week of June 13, 2016) through the low of $2.85 (week of August 22, 2016). National average basis firmed 3 cents last week, calculated at 36 cents under the July futures contract last Friday.

Corn (Old-crop Futures): The July 2018 contract closed 7.75 cents higher at $4.06 1/4. The contract extended its secondary (intermediate-term) uptrend last week to a high of $4.08 1/4. However, the sell-off seen late in the week took July corn back below resistance near $4.06 3/4, a price that marks the 61.8% retracement level of the previous downtrend from $4.34 1/4 through the low of $3.62. Given weekly stochastics remain above the overbought level of 80%, the contract is vulnerable to establishing an earlier than normal seasonal high and move into a secondary downtrend.

Corn (New-crop Futures): The December 2018 contract closed 6.50 cents higher at $4.21. New-crop December corn extended its seasonal uptrend to a new high of $4.22 3/4 last week. However, weekly stochastics are nearing 90%, indicating a sharply overbought situation and in position for a potential bearish crossover. This would again signal a possible move to a secondary (intermediate-term) downtrend.

Soybeans (Cash): The DTN National Soybean Index (NSI, national average cash price) closed at $9.64, down 14 cents for the week. It could be argued that cash soybeans remain in a secondary (intermediate-term) 3-wave downtrend, with the recent high weekly close of $9.83 (week of April 9) the peak of Wave B (second wave). Confirmation of this would be a weekly close below the Wave A (first wave) low weekly close of $9.50 (week of March 19).

Soybeans (Old-crop Futures): The July contract closed at $10.36 3/4, down 19 1/2 cents for the week. July soybeans remains in a wide-ranging secondary (intermediate-term) sideways trend with boundaries of $9.65 1/4 (low the week of January 8) and $10.90 1/4 (high the week of February 26). The contract continues to hold in the upper-half of this range, or above $10.27 3/4 while weekly stochastics remain neutral-to-bearish below the overbought level of 80%.

Soybeans (New-crop Futures): The November 2018 contract closed at $10.37 1/4, down 9 3/4 cents for the week. November soybeans remain in a secondary (intermediate-term) 3-wave downtrend. The week of April 2 saw the contract post a bearish reversal that included a new high of $10.60 before a lower weekly close. This price marks the peak of the previous 5-wave uptrend from the low of $9.23 1/2 (week of June 19, 2017). Last week's high of $10.57 3/4 looks to be the Wave B (second wave) peak, with Wave C expected to move below the low of Wave A (first wave) at $10.25.

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