Grain Market Commentary for May 3, 2017

May 3, 2017

Commodity Period Price Weekly Movement
Corn CBOT July 3.75  08 cents
Soybeans CBOT July 9.75  19 cents
Wheat CBOT July 4.54  27 cents
Wheat Minn. July 5.61  11 cents
Wheat Kansas July 4.63  36 cents
Chicago Oats July 2.38  18 cents
Canadian $ June 0.7293  0.55 points

Corn

Looks like the rain across the Midwest is becoming more of an issue as the bounce in the futures sent many hedge funds to the sidelines as the short covering rally we spoke of last week is now a reality catapulting corn futures 10 to 15 cents higher since our last report. Going forward the weather will be front and center as the race to complete planting is becoming the main focus for the Midwest Corn Belt. Support on the July contract is seen at $3.60 while overhead resistance is still at $3.80 – $4.

Short term indicators are now neutral but the main trend is still down.

Soybeans

The recent weather in major growing areas proved to be more of a hindrance for the new soybean crop as any real delays in the corn planting may be pushed to plant soybeans and thereby add to the bulging supply chain. The July contract has support at the $9.40 level for the time being. Failure to hold this support line on a close would suggest a re-test of the $9 level once again and possibly $8.50 which is the 2016 low. Immediate overhead resistance is seen at the $10 mark on both the July and November contracts. The $11 number is where you need to see the futures contract before you even start to see a chance for any significant reversal in the five-year-old bearish trend.

Short term indicators are all negative and the main trend is still down.

Wheat

Confirming our positive reversal signal from April 25, we did indeed receive the expected pop in prices this week. Going forward, the next few days could see more work in the $4.30 – $4.40 levels on the July contract before attempting higher prices. The expanding wave count on the July contract suggests higher prices into June of this year. Remembering that this is technical analysis, there are no guarantees with this prediction. Meanwhile, this move has given us another “red signal” to add to our collection. This is now three short term bullish signals for the July contract. We will be looking for other signals in the coming weeks for more clues of a possible confirmation of a bottom. Support on the July contract is seen at $4.15 and again closer to the $4 mark. Our overhead resistance is now $4.60 – $4.80 also on the July contract while our major overhead trend line runs across the daily chart around $5.20.

Meanwhile, short term indicators are now positive but the primary trend is still down.

Harvest 2017 crop cash prices as of close on May 3, 2017
SWW @ $213.45/MT ($5.81/bu), HRW @ $213.45/MT ($5.81/bu),
HRS @ $231.58/MT ($6.30/bu), SRW @ $213.45/MT ($5.81/bu).

Grain Market Commentary for April 26, 2017

April 26, 2017

Commodity Period Price Weekly Movement
Corn CBOT July 3.67  03 cents
Soybeans CBOT July 9.56  05 cents
Wheat CBOT July 4.27  00 cents
Wheat Minn. July 5.50  05 cents
Wheat Kansas July 4.25  05 cents
Chicago Oats July 2.20  02 cents
Canadian $ June 0.7350  0.75 points

Corn

We are switching to the July corn contract for our analysis as Friday, April 28 which is the first notice day on the May contract. One concern that I see for corn is the persistent rainfall that seems to be lingering around the U.S. mid-west. Of course it is still early, but it is worth watching. Weather forecasts suggest the 10 day outlook calls for more rain and cooler temperatures. Support on the July contract is seen at $3.60 while overhead resistance is still at $4.

Short term indicators are negative and the main trend is still down.

Soybeans

We will be focusing on the July and November contracts for soybeans with regard to the technicals starting this week. The July contract seems to have found a temporary bottom at the $9.40 level for the time being. Failure to hold this support line on a close would suggest a re-test of the $9 level once again. Supply overhang is still a serious concern with South America’s bumper harvest numbers. Immediate overhead resistance is seen at the $10 mark on the July contract. Short term indicators are all negative and the main trend is still down.

Wheat

We received a positive indicator on Tuesday, April 25 suggesting at least a temporary bottom and it should be worth watching. With record short positions by hedge funds, this signal alone could be the start of a short covering rally which could catapult prices higher over the near term. This of course is not a signal to go long, but rather an indicator that this six-year bear market could be coming to an end this season. A second pattern that I’m watching is indicating a possible bottom in the wheat by early summer or earlier. This of course is just a pattern that is developing and has not completed its formation, but one that I will be watching closely. We will be looking for other signals in the coming weeks for more clues of a possible bottoming action. Support on the July contract is seen at $4.15 and again closer to the $4 mark. Our overhead resistance is now $4.40 – $4.50 also on the July contract.

Meanwhile, short term indicators are still negative and the primary trend is still down.

Harvest 2017 crop cash prices as of close on April 26, 2017
SWW @ $198.46/MT ($5.40/bu), HRW @ $198.46/MT ($5.40/bu),
HRS @ $238.45/MT ($6.49/bu), SRW @ $198.46/MT ($5.40/bu).

Grain Market Commentary for April 19, 2017

April 19, 2017

Commodity Period Price Weekly Movement
Corn CBOT May 3.62  04 cents
Soybeans CBOT May 9.50  02 cents
Wheat CBOT May 4.19  15 cents
Wheat Minn. May 5.37  10 cents
Wheat Kansas May 4.17  13 cents
Chicago Oats May 2.18  07 cents
Canadian $ June 0.7420  0.95 points

Corn

Corn has tracked sideways for the past three weeks between our $3.50 support and our $3.80 resistance. U.S. corn planting is off to a slow start due to rain, but warmer, drier weather is expected in the eastern Corn Belt next week. Charts are quiet with the major trend still down. Resistance is at the $4 mark while support is seen at $3.50 and $3.40.

Short term indicators are negative and the main trend is still down.

Soybeans

Soybean futures prices have dropped from the $10.50 level to our $9.30 support line. That’s a $1.20 drop since our February 22 red sell signal. News from South America remains negative, while Brazil's soybean harvest is almost 90% complete. Without sounding repetitious, the market is in a major downtrend and rallies should be sold. If the $9.30 support fails and closes below those levels on the lead month chart, our next major support is at the $8.50 level.

Short term indicators are all negative and the main trend is still down.

Wheat

Our red sell signal from March 13 is still valid as we probe this $4.15 support level on the May contract. Our overhead resistance is now down to $4.45 on the May contract. This coincides with a four-year-old downtrend line. If we are unable to close convincingly above the $4.50 level, we are destined to re-test major support at $4.

Short term indicators are still negative and the primary trend is still down.

Harvest 2016 crop cash prices as of close on April 19, 2017
SWW @ $200.30/MT ($5.45/bu), HRW @ $200.30/MT ($5.45/bu),
HRS @ $233.73/MT ($6.36/bu), SRW @ $200.30/MT ($5.45/bu).