Grain Market Commentary for June 7, 2017

June 7, 2017

Commodity Period Price Weekly Movement
Corn CBOT July 3.84  15 cents
Soybeans CBOT July 9.37  10 cents
Wheat CBOT July 4.47  17 cents
Wheat Minn. July 6.05  32 cents
Wheat Kansas July 4.51  20 cents
Chicago Oats July 2.48  01 cents
Canadian $ June 0.7405  0.05 points

Corn

We currently sit at our $3.80 resistance line, and the charts are looking positive. With a little help, we hope to challenge the all-important $4 trend line in the coming weeks. It is likely that we will have a correction once this goal is accomplished. With the unusual weather this season, we could be looking at the year of the trend change, but first we need to close through that $4 barrier with confidence. Support on the July contract is seen at $3.60, while overhead resistance is still at $3.80, with major resistance at the $4 mark based on the lead month contract.

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

Soybeans

Our $9.40 support level, which was broken last week, now becomes our overhead resistance on the July contract. Soybeans still look like they need a major story to turn the tide and stop the downward pressure on prices. Unfortunately, the late spring could likely translate into even more acres. Our red sell signal on May 19 is still intact, and we will possibly see more downside after the next bounce in prices have been completed. Overhead resistance is seen at $9.50 and again at $9.80, while support in the July contract is now at the $9 mark. It is very likely we will see a test of the $9 price on the July contract in the coming weeks. It is important that this level holds, as there isn’t much support below there until we approach the $8.50 level.

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

Wheat

Spring wheat has been front and center for the past two weeks, as prices have rocketed more than 70 cents per bushel on the July contract. The chart indicators that we mentioned in the previous commentaries have performed as expected. We are currently challenging the primary or main trend line that has been in place since 2008. This won’t go without a fight, and for that reason I expect we could see a correction from these levels. According to our charts, we are looking at a major trend-line that runs between $6.20 and $6.40 on the July Spring contract. This is a 9 year old trend-line that will require work to be negated. Having said that, I think it will eventually be broken, and the trend will change to the upside. This of course could take patience. Meanwhile, our intermediate trend is positive on the spring wheat. As for Chicago, the charts are looking positive but not to the same degree. We have our five wave formation that suggests we could be looking at $5 wheat by July. The trend-line on the Chicago contract is around that level; while it is very likely to be tested, breaking through it may not be as easy. Meanwhile, solid support is seen at $4.20 while our resistance at $4.60 and again closer to the $5 mark.

Short term indicators are have turned positive, but the primary trend is down.

Harvest 2017 prices as of the close, June 7 are as follows:

SWW @ $215.27/MT ($5.86/bu), HRW @ $212.79/MT ($5.79/bu),
HRS @ $249.49/MT ($6.79/bu), SRW @ $215.27/MT ($5.79/bu)

Grain Market Commentary for May 31, 2017

May 31, 2017

Commodity Period Price Weekly Movement
Corn CBOT July 3.71  01 cents
Soybeans CBOT July 9.26  22 cents
Wheat CBOT July 4.30  02 cents
Wheat Minn. July 5.72  11 cents
Wheat Kansas July 4.31  01 cents
Chicago Oats July 2.48  10 cents
Canadian $ June 0.7402  0.45 points

Corn

With better than 90% of the U.S. crop planted, the first stage towards a 2017crop has been completed. Going forward, we will see if the weather cooperates with the outcome. The charts still show a sideways movement, but it has a positive undertone. We continue to trade between the $3.60 – $3.90 level as it has done since the summer of 2016. The main downtrend line on our weekly chart still sits at $4 while the good support is seen at $3.50. Support on the July contract is seen at $3.60 while overhead resistance is still at $3.80 with major resistance at the $4 mark.

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

Soybeans

We finally broke the through the $9.40 support level on the lead month as we thought we might since receiving the red sell signal on May 19. It also came on the heels of the U.S. long weekend. The $9 price level on the July contract coincides with the low point from last July and the last line of support before a challenge to the $8.50 level may be initiated. If the $9 support fails to hold on the lead month contract, there is a very good chance that we will challenge the $8.50 price target coming into the early summer. This is according to what I see in the technical analysis. There is not much support below $9 according to the charts, until a test of the $8.50 bottom from the 2015 charts. Hopefully the $9 support level will hold.

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

Wheat

We had a quiet week in the Chicago wheat markets the week of May 29, but the Minneapolis continued to build on its chart pattern and is becoming more bullish by the week. Spring wheat broke its downtrend line back in November and needs to break above the $6. level on the lead month contract to show its bullish side. A break above the $6.40 on the lead month contract could incite a trend reversal according to the weekly charts. Both Chicago and Minneapolis are looking very constructive for the next couple of months. We still anticipate a challenge of the $5 resistance level on the Chicago by early summer based on the formation that I see. Support on the July contract is seen at $4.15 and again closer to the $4 mark. Our overhead resistance is at $4.40 – $4.60, also on the July contract, while our major overhead trend line runs across the monthly chart around $5.

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

Harvest 2017 crop cash prices as of close on May 31, 2017
SWW @ $198.22/MT ($5.39/bu), HRW @ $198.22/MT ($5.39/bu),
HRS @ $233.70/MT ($6.36/bu), SRW @ $198.22/MT ($5.39/bu).

Grain Market Commentary for May 24, 2017

May 24, 2017

Commodity Period Price Weekly Movement
Corn CBOT July 3.71  01 cents
Soybeans CBOT July 9.48  18 cents
Wheat CBOT July 4.32  05 cents
Wheat Minn. July 5.61  20 cents
Wheat Kansas July 4.33  07 cents
Chicago Oats July 2.38  05 cents
Canadian $ June 0.7450  1.15 points

Corn

Sideways action has become the norm for the past year as the futures continue to trade between the $3.60 – $3.90 level as it has done since the summer of 2016. The main downtrend line still sits at $4 while the major support is seen at $3. Not exactly a promising long range outlook with regard to direction. Without sounding repetitious, we are currently locked into a $3.60 – $3.80 trading zone on the forward contracts and until we close above or below this area, we will probably continue to track sideways. Support on the July contract is seen at $3.60 while overhead resistance is still at $3.80 with major resistance at the $4 mark.

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

Soybeans

Soybeans continue to trade in the $9.25 – $10 range and there is little fresh news. We did receive a red sell signal last week, as the indicators continue to show downward pressure on the July contract. For the time being, the new crop November chart is not quite as negative in appearance. Support is still seen at the $9.25 level. A close below these levels could suggest a move down to the $8.50 bottom established back in 2015.

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

Wheat

The charts on the wheat contracts, both Chicago and Minneapolis, are looking very constructive for the next couple of months. Based on the formation that I see, we are in an expanding wave that suggests a move higher during the month of June and possibly into harvest. Unseasonable weather could also still play a role in the futures price.

The short dated options expire Friday, May 26 and it is a long weekend in the U.S. This alone is enough to expect something unexpected in the price going into the week of May 29. Support on the July contract is seen at $4.15 and again closer to the $4 mark. Our overhead resistance is at $4.40 – $4.60, also on the July contract, while our major overhead trend line runs across the monthly chart around $5.

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

Harvest 2017 crop cash prices as of close on May 24, 2017
SWW @ $198.77/MT ($5.41/bu), HRW @ $198.77/MT ($5.41/bu),
HRS @ $227.86/MT ($6.20/bu), SRW @ $198.77/MT ($5.41/bu).