Grain Market Commentary for February 9, 2017

February 9, 2017

Commodity Period Price Weekly Movement
Corn CBOT March 3.69  01 cents
Soybeans CBOT March 10.50  13 cents
Wheat CBOT March 4.43  09 cents
Wheat Minn. March 5.68  13 cents
Wheat Kansas March 4.51  11 cents
Chicago Oats March 2.54  04 cents
Canadian $ March 0.7612  0.50 points

Corn

This month’s United States Department of Agriculture (USDA) report highlighted a 4 MMT increase in Chinese demand coupled with a 1.5 MMT increase in Mexican output.
As for the charts, we are still stuck at our $3.70 resistance, but if and when we manage to clear this resistance convincingly and close above here, we are cleared for our next task which is an attempt at the $3.80 – $4 corn. Our main downtrend line runs just north of $4 on the lead month contract. Short term and weekly indicators are still positive, but the main trend is still down.

Soybeans

Highlights of the USDA report showed Argentina’s soybean crop being cut 1.5 million metric tonnes but the cut was less than expected and the beans softened after the report. The trading range is getting smaller each passing week and soybeans are heading into a narrow vertex on the weekly chart, which should resolve itself before the end of May. Currently, the range is between $10 and $11. Initial support is still at the $10. level on March, and once we close convincingly above $10.75, our next target is the $11 – $11.20 area.

Short and intermediate term indicators are still positive but the main trend is still down.

Wheat

Wheat behaved as expected and had a nice rally after the USDA report. Our target of $4.40 was finally met and from this level we could expect another pullback to work on our inverted head and shoulders formation before heading high to our next target of $4.50 and a challenge to our intermediate trend line. According to the charts we may see this attempt in the coming weeks. The completion of our inverted pattern suggests we may see the lead month contract price as high as $4.80 which would not only complete the pattern, but challenge our intermediate downtrend. Our red buy signal from Christmas is still intact.

CBOT March wheat initial support is still seen at the $4.20 level while overhead resistance is still at the $4.40 – $4.45 level.

Both short and intermediate term indicators are still positive, but the primary trend is still down.

Harvest 2017 crop cash prices as of close on February 9, 2017
SWW @ $194.70 ($5.30/bu), HRW @ $194.70/MT ($5.30/bu),
HRS @ $224.61/MT ($6.11/bu), SRW @ $194.70/MT ($5.30/bu).

Grain Market Commentary for January 25, 2017

January 25, 2017

Commodity Period Price Weekly Movement
Corn CBOT March 3.66  01 cents
Soybeans CBOT March 10.55  20 cents
Wheat CBOT March 4.24  07 cents
Wheat Minn. March 5.72  12 cents
Wheat Kansas March 4.37  19 cents
Chicago Oats March 2.60  03 cents
Canadian $ March 0.7650  0.90 points

Corn

This week corn struggled with clearing the 50% retracement levels from the July 2016 tops to the Labour Day weekend lows. This is a very important resistance level on our charts. The 50% move up coincides with our resistance of $3.70 that has been in our target zone for some time. If we can convincingly close above this $3.70 level, our next upside target is the $3.80 – $3.85 resistance. For the time being, however, our overhead resistance remains at $3.70 while support is seen at $3.40.

Short term and weekly indicators are still positive, but the main trend is still down.

Soybeans

After reaching our resistance of $10.70 we are now retracing on the soybeans. From these levels we are getting the expected pullback and we anticipate support at the $10.25 – $10.45 range. Eventually, the extension of last week’s move should put our next upside target around $11 or just above there. Initial support is still at the $10.25 level on March, and once we close convincingly above $10.75, our next target is the $11 – $11.20 area.

Short and intermediate term indicators are still positive but the main trend is still down.

Wheat

Wheat continues to impress, as our charts are showing good support around $4 – $4.20 and the intraday chart shows us a pattern that suggests we will see the next upside shot take us to, or close to, the $4.50 top made back in October. This is an important level on the March CBOT chart as it completes an inverted head and shoulders formation. I would expect a pullback from that level, but if we manage to clear the highs convincingly we could be heading towards a more significant resistance level and a major target of $4.60. Our red buy signal from three weeks ago is still intact.

CBOT March wheat initial support is still seen at the $4.20 level and again at $4, while overhead resistance is at the $4.40 – $4.45 level.

Both short and intermediate term indicators are still positive but the primary trend is still down.

Harvest 2017 crop cash prices as of close on January 25, 2017
SWW @ $184.72 ($5.03/bu), HRW @ $184.72/MT ($5.03/bu),
HRS @ $219.79/MT ($5.98/bu), SRW @ $184.72/MT ($5.03/bu).

Grain Market Commentary for January 18, 2017

January 18, 2017

Commodity Period Price Weekly Movement
Corn CBOT March 3.65  07 cents
Soybeans CBOT March 10.75  65 cents
Wheat CBOT March 4.31  12 cents
Wheat Minn. March 5.72  12 cents
Wheat Kansas March 4.52  20 cents
Chicago Oats March 2.57  25 cents
Canadian $ March 0.7560  0.35 points

Corn

This week proved to be positive for corn as once again we tested the upper end of our resistance on the March contract and closed above our two month high of $3.60. From here we may see a small correction, but another attempt and a close above $3.70 should catapult us towards the $3.80 level in the coming months or even weeks. Meanwhile, our overhead resistance remains at $3.70 while support is seen at $3.40.

Short term and weekly indicators are still positive, but the main trend is still down.

Soybeans

The move continued this week on the March contract as soybeans gained about 60 cents per bushel to hit our $10.70 resistance level that we spoke of last week. We also received a red buy signal this week on the daily chart as a result of the strength of the move. This momentum could just be getting started as there is very little resistance from this $10.70 level through the $11 – $11.40 levels based on the March contract. Three key factors influencing this rally were the United States Department of Agriculture (USDA) reduction in yields, issues with the South America crop, and short covering by hedge funds. We will find out in the next few trading sessions if we have any more momentum on the upside. Initial support is still at the $10.25 level on March, and once we close convincingly above $10.75, our next target is the $11 – $11.20 area.

Short and intermediate term indicators have now turned positive but the main trend is still down.

Wheat

As expected, the wheat markets behaved as forecast. We ascended to within two cents of the $4.40 level on March and have since stalled. Our red buy signal from two weeks ago is still intact, but a pullback is likely before an attempt at our $4.40 resistance and hopefully our next target price of $4.50 – $4.60.

Before we get too excited, a major trend change takes time and can be slow and painstaking and we haven’t seen one for several years; but this is the type of price action necessary before we can even hope for higher prices leading to a major trend change.

The HRS completed our inverted head and shoulders formation on the March contract and has since stalled. Charts suggest a pullback from these levels since we have a nicely formed key reversal on the daily chart. I am looking for support around the $5.40 – $5.50 level on the March contract, and either way, I feel we will possibly challenge the $5.90 level again once our correction is completed.

CBOT March wheat initial support is still seen at the $4.20 level and again at $4, while overhead resistance is at the $4.40 – $4.50 level.

Both short and intermediate term indicators are still positive but the primary trend is still down.

Harvest 2017 crop cash prices as of close on January 18, 2017
SWW @ $183.15 ($4.98/bu), HRW @ $190.46/MT ($5.18/bu),
HRS @ $230.65/MT ($6.28/bu), SRW @ $190.46/MT ($51.8/bu).