Grain Market Commentary for July 18, 2018

Corn

The intermediate trend in corn has fallen back below our major downtrend line on the monthly chart. This indicates we have double the work to do before we can see a bullish reversal in the corn market in the months ahead.

Technically, we are still on our sell signal from June 4 on the daily chart, although we are definitely in an oversold condition in the short term time frame. The $3.35 support level from last week’s commentary has held and it’s possible that we may see a bounce in prices in the coming weeks, before we continue our search for support and a possible bottom.

Current overhead resistance is still seen at the $3.50 – $3.60 major downtrend line, which was negated to the downside recently. This line shall now serve as an obstacle from further price increases in the coming weeks. Support is still seen at the $3.25 level and again at the $3 mark.

Indicators are negative and the primary trend is still down.

Soybeans

Soybeans continue to find temporary support in the $8.40 price range on the September futures. The red sell signal back on June 4 is still valid although we are oversold and could see a bounce in prices in the coming weeks

The September futures continue to flirt with the six-year-old downtrend line while trading on both sides of that trend line. The price action seems to be waiting for confirmation of the China U.S. tariffs, or a weather related issue, before deciding whether or not this major support will become future overhead resistance or prove its worth as the bottom support before we start to move higher. Either way, this is an important level for technicians.

If prices continue lower, we could see a fall of at least 75 cents to a dollar lower, testing a 10-year-old support line.

Immediate overhead resistance is at the $8.50 – $9 level while good support is seen at the $8.40 level based on the September futures. The charts suggest that a bounce even as high as $9.50 – $10 is possible, but will not change the likelihood that we will retest this $8.40 in the weeks or months ahead.

The primary trend remains down.

Wheat

Wheat remains the stronger of the grains in a technical view; however, everything is relative and the harvest pressure; along with the sympathetic view of the other grains, suggest that we are not finished correcting in the futures market price for September.

Currently, the futures seem content between the $4.75 and $5.25 range and will take its cue for direction from soybeans and corn in the short term. A rally to the $5.25 level on the September contract may be the highs for the month of July.

If we fail to find necessary support at the $4.75 level, we will likely head lower to the $4.40 – $4.60 support range based on the September futures contract.

Short and intermediate term indicators are negative while the primary trend is neutral, as it is still above the 10-year-old downtrend line.

Harvest 2018 Grain prices as of the close July 18, 2018 are as follows:
SWW @ $227.02/MT ($6.18/bu),  HRW @ $234.28/MT ($6.38/bu),
 HRS @ $214.21/MT ($5.83/bu),   SRW @ $231.86/MT ($6.31/bu).