Grain Market Commentary for March 21, 2018

Commodity Period Price Weekly Movement
Corn CBOT May 3.75 ↓ 13 cents
Soybeans CBOT May 10.30 ↓ 02 cents
Wheat CBOT May 4.53 ↓ 25 cents
Wheat Minn. May 5.90 ↓ 32 cents
Wheat Kansas May 4.84 ↓ 40 cents
Chicago Oats May 2.31 ↓ 24 cents
Canadian $ March 0.7768 ↑ 0.25 points

Corn

My last report suggested that we would head towards the $4 level on the Chicago May contract after breaking the four-year-old downtrend line at the $3.75 level based on the May futures. We reached $3.96 and have since pulled back to test the breakout at the $3.75 level. The speed of this correction suggests that we may dip below the intermediate trend line which would signal a neutralized intermediate trend instead of a bullish tone going forward for the next few weeks.

Initial support is still at $3.70 on the May contract while overhead resistance is still at $4 also on the May contract. Short term indicators are positive but the primary trend, is still down.

Soybeans

For those of you who follow my commentary, I was looking for stiff resistance on the May contract at the $10.80 level and the charts did not fail me. At this point in the analysis, we should expect to see once again the $10 level challenged for solid support on the May contract.

The $10.80 level on the lead month is coincident with the six-year-old down trend line and it was expected to offer up stiff resistance. The big question now is whether or not we continue all the way back to the $9.50 level to retest the support or do we try once again from the $10 level on the May futures contract.

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

Indicators are mixed as the short term indicators are now negative, the intermediate trend is neutral, all while the primary trend is down.

Wheat

Based on the May Chicago wheat contract we did see an assault on the primary trend line at the $5.08 level last week before it failed. As mentioned many times, the primary trend line is a good spot to sell some of your product when the need is there and we did reach it last week.

Meanwhile, the intermediate down trend line turned neutral many months ago on the weekly chart, while the $5.10 – $5.25 price point is necessary to end the bear market on the primary trend.

The reversal from the $5.08 level was quite severe and for that reason I would expect continued weakness even though we may have a bounce from the $4.40 level on the May contract.

Daily indicators are now bearish while the intermediate trend is still neutral, but the primary trend is still down.

Cash Grain prices as of the close, March 21, are as follows: SWW @ $219.96 ($5.90/bu), HRW @ $212.22/MT ($5.78/bu), HRS @ $235.17/MT ($6.40/bu), SRW @ $209.86/MT ($5.71/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.