Grain Market Commentary for February 9, 2017

February 9, 2017

Commodity Period Price Weekly Movement
Corn CBOT March 3.69  01 cents
Soybeans CBOT March 10.50  13 cents
Wheat CBOT March 4.43  09 cents
Wheat Minn. March 5.68  13 cents
Wheat Kansas March 4.51  11 cents
Chicago Oats March 2.54  04 cents
Canadian $ March 0.7612  0.50 points

Corn

This month’s United States Department of Agriculture (USDA) report highlighted a 4 MMT increase in Chinese demand coupled with a 1.5 MMT increase in Mexican output.
As for the charts, we are still stuck at our $3.70 resistance, but if and when we manage to clear this resistance convincingly and close above here, we are cleared for our next task which is an attempt at the $3.80 – $4 corn. Our main downtrend line runs just north of $4 on the lead month contract. Short term and weekly indicators are still positive, but the main trend is still down.

Soybeans

Highlights of the USDA report showed Argentina’s soybean crop being cut 1.5 million metric tonnes but the cut was less than expected and the beans softened after the report. The trading range is getting smaller each passing week and soybeans are heading into a narrow vertex on the weekly chart, which should resolve itself before the end of May. Currently, the range is between $10 and $11. Initial support is still at the $10. level on March, and once we close convincingly above $10.75, our next target is the $11 – $11.20 area.

Short and intermediate term indicators are still positive but the main trend is still down.

Wheat

Wheat behaved as expected and had a nice rally after the USDA report. Our target of $4.40 was finally met and from this level we could expect another pullback to work on our inverted head and shoulders formation before heading high to our next target of $4.50 and a challenge to our intermediate trend line. According to the charts we may see this attempt in the coming weeks. The completion of our inverted pattern suggests we may see the lead month contract price as high as $4.80 which would not only complete the pattern, but challenge our intermediate downtrend. Our red buy signal from Christmas is still intact.

CBOT March wheat initial support is still seen at the $4.20 level while overhead resistance is still at the $4.40 – $4.45 level.

Both short and intermediate term indicators are still positive, but the primary trend is still down.

Harvest 2017 crop cash prices as of close on February 9, 2017
SWW @ $194.70 ($5.30/bu), HRW @ $194.70/MT ($5.30/bu),
HRS @ $224.61/MT ($6.11/bu), SRW @ $194.70/MT ($5.30/bu).

Marty Hibbs is a grain merchandiser with Grain Farmers of Ontario. Hibbs is a 25 year veteran futures trader, analyst, and portfolio manager. He was a regular guest analyst on BNN for four years and is currently authoring the Market Side education series on futures trading basics in the Ontario Grain Farmer magazine.

Grain Market Commentary for January 25, 2017

January 25, 2017

Commodity Period Price Weekly Movement
Corn CBOT March 3.66  01 cents
Soybeans CBOT March 10.55  20 cents
Wheat CBOT March 4.24  07 cents
Wheat Minn. March 5.72  12 cents
Wheat Kansas March 4.37  19 cents
Chicago Oats March 2.60  03 cents
Canadian $ March 0.7650  0.90 points

Corn

This week corn struggled with clearing the 50% retracement levels from the July 2016 tops to the Labour Day weekend lows. This is a very important resistance level on our charts. The 50% move up coincides with our resistance of $3.70 that has been in our target zone for some time. If we can convincingly close above this $3.70 level, our next upside target is the $3.80 – $3.85 resistance. For the time being, however, our overhead resistance remains at $3.70 while support is seen at $3.40.

Short term and weekly indicators are still positive, but the main trend is still down.

Soybeans

After reaching our resistance of $10.70 we are now retracing on the soybeans. From these levels we are getting the expected pullback and we anticipate support at the $10.25 – $10.45 range. Eventually, the extension of last week’s move should put our next upside target around $11 or just above there. Initial support is still at the $10.25 level on March, and once we close convincingly above $10.75, our next target is the $11 – $11.20 area.

Short and intermediate term indicators are still positive but the main trend is still down.

Wheat

Wheat continues to impress, as our charts are showing good support around $4 – $4.20 and the intraday chart shows us a pattern that suggests we will see the next upside shot take us to, or close to, the $4.50 top made back in October. This is an important level on the March CBOT chart as it completes an inverted head and shoulders formation. I would expect a pullback from that level, but if we manage to clear the highs convincingly we could be heading towards a more significant resistance level and a major target of $4.60. Our red buy signal from three weeks ago is still intact.

CBOT March wheat initial support is still seen at the $4.20 level and again at $4, while overhead resistance is at the $4.40 – $4.45 level.

Both short and intermediate term indicators are still positive but the primary trend is still down.

Harvest 2017 crop cash prices as of close on January 25, 2017
SWW @ $184.72 ($5.03/bu), HRW @ $184.72/MT ($5.03/bu),
HRS @ $219.79/MT ($5.98/bu), SRW @ $184.72/MT ($5.03/bu).

Marty Hibbs is a grain merchandiser with Grain Farmers of Ontario. Hibbs is a 25 year veteran futures trader, analyst, and portfolio manager. He was a regular guest analyst on BNN for four years and is currently authoring the Market Side education series on futures trading basics in the Ontario Grain Farmer magazine.

Grain Market Commentary for January 18, 2017

January 18, 2017

Commodity Period Price Weekly Movement
Corn CBOT March 3.65  07 cents
Soybeans CBOT March 10.75  65 cents
Wheat CBOT March 4.31  12 cents
Wheat Minn. March 5.72  12 cents
Wheat Kansas March 4.52  20 cents
Chicago Oats March 2.57  25 cents
Canadian $ March 0.7560  0.35 points

Corn

This week proved to be positive for corn as once again we tested the upper end of our resistance on the March contract and closed above our two month high of $3.60. From here we may see a small correction, but another attempt and a close above $3.70 should catapult us towards the $3.80 level in the coming months or even weeks. Meanwhile, our overhead resistance remains at $3.70 while support is seen at $3.40.

Short term and weekly indicators are still positive, but the main trend is still down.

Soybeans

The move continued this week on the March contract as soybeans gained about 60 cents per bushel to hit our $10.70 resistance level that we spoke of last week. We also received a red buy signal this week on the daily chart as a result of the strength of the move. This momentum could just be getting started as there is very little resistance from this $10.70 level through the $11 – $11.40 levels based on the March contract. Three key factors influencing this rally were the United States Department of Agriculture (USDA) reduction in yields, issues with the South America crop, and short covering by hedge funds. We will find out in the next few trading sessions if we have any more momentum on the upside. Initial support is still at the $10.25 level on March, and once we close convincingly above $10.75, our next target is the $11 – $11.20 area.

Short and intermediate term indicators have now turned positive but the main trend is still down.

Wheat

As expected, the wheat markets behaved as forecast. We ascended to within two cents of the $4.40 level on March and have since stalled. Our red buy signal from two weeks ago is still intact, but a pullback is likely before an attempt at our $4.40 resistance and hopefully our next target price of $4.50 – $4.60.

Before we get too excited, a major trend change takes time and can be slow and painstaking and we haven’t seen one for several years; but this is the type of price action necessary before we can even hope for higher prices leading to a major trend change.

The HRS completed our inverted head and shoulders formation on the March contract and has since stalled. Charts suggest a pullback from these levels since we have a nicely formed key reversal on the daily chart. I am looking for support around the $5.40 – $5.50 level on the March contract, and either way, I feel we will possibly challenge the $5.90 level again once our correction is completed.

CBOT March wheat initial support is still seen at the $4.20 level and again at $4, while overhead resistance is at the $4.40 – $4.50 level.

Both short and intermediate term indicators are still positive but the primary trend is still down.

Harvest 2017 crop cash prices as of close on January 18, 2017
SWW @ $183.15 ($4.98/bu), HRW @ $190.46/MT ($5.18/bu),
HRS @ $230.65/MT ($6.28/bu), SRW @ $190.46/MT ($51.8/bu).

Marty Hibbs is a grain merchandiser with Grain Farmers of Ontario. Hibbs is a 25 year veteran futures trader, analyst, and portfolio manager. He was a regular guest analyst on BNN for four years and is currently authoring the Market Side education series on futures trading basics in the Ontario Grain Farmer magazine.

Grain Market Commentary for January 11, 2017

January 11, 2017

Commodity Period Price Weekly Movement
Corn CBOT March 3.57  03 cents
Soybeans CBOT March 10.11  05 cents
Wheat CBOT March 4.19  01 cents
Wheat Minn. March 5.61  17 cents
Wheat Kansas March 4.32  05 cents
Chicago Oats March 2.32  07 cents
Canadian $ March 0.7590  0.75 points

Corn

With the World Agricultural Supply and Demand Estimates Report (WASDE) released at noon today, we saw a reduction in corn yields and also in carryout. The corn markets were flat at the close as of January 12. The upper end of our range-bound $3.40 – $3.60 corn price was tested today, but we failed to close above there. If we manage to close above the $3.60 resistance in the coming week, we could trade another 20 cents higher on the March contract.

Meanwhile, our overhead resistance remains at $3.60 while support is seen at $3.40. Short term and weekly indicators are now positive but the main trend is still down.

Soybeans

Reduced yields were also the focus of the WASDE report on soybeans. The report had a bullish interpretation as the March contract found solid support once again at the $10. level and closed 28 cents per bushel higher at the close of the trading session. The resistance level of $10.40 was a clear obstacle as the rally stopped dead. We will find out in the next few trading sessions if we have any more momentum on the upside. Initial support is still at the $10 level and once we clear the $10.40 level a challenge of the $10.70 will be a tougher test.

All indicators are still negative, and the primary trend is still down.

Wheat

Faced with the lowest acreage planting numbers in a very long time, the CBOT March contract ran the stops above the $4.28 highs after the WASDE report. Later in the session prices retreated once again and settled at our resistance levels of $4.26, but still up 7 cents per bushel on the day. We received a red buy signal last week on the March weekly contract. This is a positive sign even if we pull back from these levels. The topic of the day was once again the HRS wheat as prices are completing our inverted head and shoulders we spoke of last month. Prices have gained more than 40 cents per bushel on the HRS March contract.

Meanwhile initial support is still seen on the March CBOT at the $4 level and overhead resistance is at $4.30 – $4.45. Both short and intermediate term indicators are now positive but the primary trend is still down.

Harvest 2017 crop cash prices as of close on January 11, 2017
SWW @ $176.19 ($4.80/bu), HRW @ $173.76/MT ($4.73/bu),
HRS @ $225.55/MT ($6.14/bu), SRW @ $178.60/MT ($4.86/bu).

Marty Hibbs is a grain merchandiser with Grain Farmers of Ontario. Hibbs is a 25 year veteran futures trader, analyst, and portfolio manager. He was a regular guest analyst on BNN for four years and is currently authoring the Market Side education series on futures trading basics in the Ontario Grain Farmer magazine.

Grain Market Commentary for January 5, 2017

January 5, 2017

Commodity Period Price Weekly Movement
Corn CBOT March 3.60  12 cents
Soybeans CBOT March 10.16  01 cents
Wheat CBOT March 4.18  12 cents
Wheat Minn. March 5.44  13 cents
Wheat Kansas March 4.26  17 cents
Chicago Oats March 2.39  11 cents
Canadian $ March 0.7515  1.28 points

Corn

Another short week and typical holiday style move as most participants were away for the Christmas season. The corn crept back up to the resistance levels of $3.60 – $3.65 on the March contract. As with Labour Day weekend, most U.S. holidays can create market reversals when you look in the rear view mirror. This holiday produced a red buy signal on our daily chart. This is only an indication that there could be higher prices in the coming weeks as it is only a daily chart and not the weekly or monthly chart. Corn now looks ready to try and close above our resistance levels, and if they can do so, we could see a nice 15 to 20 cent rally from these levels. Meanwhile, our overhead resistance remains at the $3.65 level, based on the close of the March contract. Support is seen at $3.35 with our major support level back at $3.

Although indicators are mixed, the main trend is still down.

Soybeans

Soybeans rallied over the holidays from the $10 support level, but unlike corn, the charts are not as bullish. Overhead resistance sits at the $10.30 – $10.60 level based on the March contract, while the main trend line resistance is around $11.

All indicators are still negative, and the primary trend is still down.

Wheat

The March CBOT wheat contract had a productive week as the daily charts flirted with our $4.20 resistance levels. We are currently still at that price, but we need a close above the $4.25 level on the March contract before we get too excited. Short term indicators have turned neutral to positive but we have a lot of work to do before we get this market to turn bullish. The $4 support level has proven itself and we should see a move higher into the spring.

Meanwhile, HRS wheat has been the strong performer and we have an inverted head and shoulders formation which suggests another 30 to 40 cents higher in the coming months or sooner. Meanwhile, initial support is seen at the $4 level on March and resistance is at $4.25 – $4.30. Short term indicators are neutral to positive but the intermediate and primary trends are still down.

Harvest 2017 crop cash prices as of close on January 5, 2017
SWW @ $172.40 ($4.69/bu), HRW @ $169.91/MT ($4.62/bu),
HRS @ $216.93/MT ($5.90/bu), SRW @ $174.89/MT ($4.76/bu).

Marty Hibbs is a grain merchandiser with Grain Farmers of Ontario. Hibbs is a 25 year veteran futures trader, analyst, and portfolio manager. He was a regular guest analyst on BNN for four years and is currently authoring the Market Side education series on futures trading basics in the Ontario Grain Farmer magazine.