Grain Market Commentary for May 22, 2018

Commodity Period Price Weekly Movement
Corn CBOT July 4.08 08 cents
Soybeans CBOT July 10.39 39 cents
Wheat CBOT July 5.32 37 cents
Wheat Minn. July 6.43 31 cents
Wheat Kansas July 5.52 37 cents
Chicago Oats July 2.52  11 cents
Canadian $ June .7789 ↓ 0.15 points

Corn

Corn prices continue to track higher in the bullish scenario of the intermediate trend. However, this bullish outlook may soon hit heavy resistance as we need a definitive close above the $4.40 – $4.50 level based on the July futures before I will call this a true bull market.

I received a red buy signal on my monthly chart while I was away which confirms the bullish tone of the intermediate trend up to the $4.50 level on the July contract. This should be challenged in the coming weeks.

Both our short term and intermediate trend is still bullish while the primary trend or long term trend, is still down. A definitive close above $4.50 will confirm the primary trend moving from neutral to bullish mode. This is the first time in six years we have seen a bull market in corn.

Current overhead resistance is seen at the $4.10 – $4.15 level on July while support is seen at the $3.90 – $4 level.

Soybeans

Soybeans continue to slosh between the $10 level and the all-important $10.80 level on the July futures contract as they have done since the first day of May. The markets are coiling and I am expecting we will see a break to the upside to challenge the $10.80 level on the July futures in the coming weeks.

The primary down-trend line is still at the $10.80 level. Short term indicators are neutral but the intermediate trend, as indicated on the weekly chart, is bullish as we await the challenge of the $10.80 level before confirming a trend reversal on our final holdout, the primary trend.  Until we have a convincing close above that level, the primary trend remains down.

Wheat

Wheat behaved as expected on May 15 as it pulled back to the support area of $4.90 and found solid support. The volatility is indicative of an excited market. The daily chart shows larger swings running stops on both sides of the daily range.

Again, this is a good sign as it indicates uncertainty in the price action and direction.

From this level we are now ready for our next target of $5.75 area based on the July futures. If this target coincides with the last of June or early part of July, I would expect that we will either see a significant pullback in prices going into the harvest for the remainder of the summer months, or a complete breakout in prices and the confirmation of a full blown bull market. Either way, $5.75 futures prices are better than $4.

Solid support is seen at the $4.80 – $5 on the July contract and our resistance is the May 3 high at the $5.40 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, May 23, 2018 are as follows:
SWW
@ $246.15/MT ($6.70/bu),  HRW @ $243.78/MT ($6.63/bu),
 HRS @ $254.18/MT ($6.92/bu),   SRW @ $241.42/MT ($6.57/bu).

Grain Farmers of Ontario is the province’s largest commodity organization, representing Ontario’s 28,000 barley, corn, oat, soybean and wheat farmers. The crops they grow cover 6 million acres of farm land across the province, generate over $2.5 billion in farm gate receipts, result in over $9 billion in economic output and are responsible for over 40,000 jobs in the province.