Grain Market Commentary for June 6, 2018

Commodity Period Price Weekly Movement
Corn CBOT July 3.78 ↓ 15 cents
Soybeans CBOT July 9.94 ↓ 29 cents
Wheat CBOT July 5.20 ↓ 03 cents
Wheat Minn. July 5.98 ↓ 13 cents
Wheat Kansas July 5.41 ↓ 01 cents
Chicago Oats July 2.40 ↓ 01 cents
Canadian $ June .7720 ↓ 0.41 points

Corn

The correction continued in the July futures as we pulled back to the $3.80 level this week. The momentum suggests there is still more downside and our price target of $3.65 from our last commentary is looking very possible in the coming weeks. This action would not reverse the bullish sentiment which we have seen in the past month. The $3.60 price point on the July futures is the re-test of the downtrend line which was negated back on March 2 of this year.

We may have seen the high for the next couple of weeks, as we did hit a significant level of resistance.  The next support on the July futures sits between $3.65 and $3.75, and if we manage to get that low, we should see another move back up to challenge the $4.12 top in the near future.

Our short term indicator has turned bearish while our intermediate trend is still bullish, but the primary trend is still down. A definitive close above $4.50 will confirm the primary trend moving from neutral to bullish mode.

Current overhead resistance is still seen at the $4.10 – $4.15 level on July, while support is seen at the $3.60 – $3.70 level.

Soybeans

Soybeans are currently testing the $10 level and there is a better than average chance that this time the $10 will not hold. This is not a cause for concern as the $10 level is really more of a psychological number than a technical line. The real support for the July futures is closer to the $9.50 level and there is a good chance we will see that level tested in the coming weeks.

Short term indicators are negative, while the intermediate trend, as indicated on the weekly chart, is bullish. The primary trend needs to see a close above the $10.80 level on the lead month futures contract to reverse the six-year-old bear market in soybeans.  Until we have a convincing close above that level, the primary trend remains down.

Wheat

Our May 30 commentary suggested that the $5.55 area would result in stiff resistance and that we would pull back to the $5 level before another attempt at the $5.55 level. June 5 saw a drop to the $5.03 price on our July futures and today, June 6 we are sitting at $5.28 as of this writing. That bounce is a little too fast to be sustained but there is still a good chance we will revisit the $5.50 – $5.75 price on our July futures before the end of June.

Solid support is seen at the $4.80 – $5 on the July contract and our resistance is the May 29 high at the $5.55 level. Once we clear that hurdle, we are set to challenge our $5.75 target.

Indicators are positive and the main primary trend is bullish.

Harvest 2018 Grain prices as of the close, June 6, 2018 are as follows:
SWW
@ $242.73/MT ($6.61/bu),  HRW @ $245.11/MT ($6.67/bu),
 HRS @ $236.54/MT ($6.44/bu),   SRW @ $241.78/MT ($6.58/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.