Grain Market Commentary for April 18, 2018

Commodity Period Price Weekly Movement
Corn CBOT May 3.83 ↓ 04 cents
Soybeans CBOT May 10.42 ↓ 06 cents
Wheat CBOT May 4.75 ↓ 12 cents
Wheat Minn. May 6.18 ↓ 11 cents
Wheat Kansas May 5.08 ↓ 24 cents
Chicago Oats May 2.39 ↓ 05 cents
Canadian $ Mar .7925 ↓ 0.25 points

Corn

We stalled as expected at the $4 level on the July futures since our last report. From these levels on both May and July I expect more of a sideways to lower price movement before we challenge the all-important $4 level once again. We will be switching over to the July contract for my next commentary on April 25. Meanwhile, we will continue to use the May contract this week for our analysis. Support on the May contract is still at $3.70 with minor support at the $3.85 level, while $4 is still the big target we need to negate to get this bull on the run.

Intermediate trend is still up while the primary trend is still down. Our charts indicate we need a close above the $4.40 level on the lead month contract before we can get excited about a primary trend reversal.

Soybeans

Like the other grains, last week was the major resistance for soybeans. We are behaving nicely as the prices are quiet and somewhat softer on the futures contract. We are, however, getting ready for an assault on the major downtrend line that cuts across the $10.80 on the lead month contract. Timing is the big unknown here as we could probe lower in the coming weeks before the attempt is made.

Initial support is seen on the May charts at the $10 – $10.20 level, with major support at the $9.50 level, while our overhead resistance level is still at the $10.80 level.

Indicators are mixed as the short term and intermediate trend is neutral to bullish, but the primary trend is still down.

Wheat

We are getting the correction that I anticipated last commentary, however, it now looks like it may be a little deeper than expected. My belief was that we would pull back to the initial support at the $4.75 level on the May futures contract but we are currently there and the move looks unfinished. The $5.20 level is the primary trend line so it is not uncommon that the pullback before the re-test is initiated could be significant. Looking at the charts, I now feel we could see a test of the $4.40 level one more time and a worst case would be a move all the way back to the $4 support level without disrupting the chart pattern. Either way, I feel we will re-test the primary downtrend line on the wheat which currently sits around the $5.20 price point based on the lead month futures chart.

We still have mixed signals as the daily and intermediate trends are still neutral, but the primary trend is still down.

A convincing close above the $5.25 on the lead month contract is necessary to break the back of this bear market.

Harvest 2018 Grain prices as of the close, April 18, are as follows:
SWW
@ $222.08 ($6.04/bu), HRW @ $217.44/MT ($5.92/bu), 

 HRS @ $235.52/MT ($6.41/bu), SRW @ $215.13/MT ($5.85/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.