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).

Grain Market Commentary for January 11, 2017

January 11, 2017

Commodity Period Price Weekly Movement
Corn CBOT March 3.57  03 cents
Soybeans CBOT March 10.11  05 cents
Wheat CBOT March 4.19  01 cents
Wheat Minn. March 5.61  17 cents
Wheat Kansas March 4.32  05 cents
Chicago Oats March 2.32  07 cents
Canadian $ March 0.7590  0.75 points

Corn

With the World Agricultural Supply and Demand Estimates Report (WASDE) released at noon today, we saw a reduction in corn yields and also in carryout. The corn markets were flat at the close as of January 12. The upper end of our range-bound $3.40 – $3.60 corn price was tested today, but we failed to close above there. If we manage to close above the $3.60 resistance in the coming week, we could trade another 20 cents higher on the March contract.

Meanwhile, our overhead resistance remains at $3.60 while support is seen at $3.40. Short term and weekly indicators are now positive but the main trend is still down.

Soybeans

Reduced yields were also the focus of the WASDE report on soybeans. The report had a bullish interpretation as the March contract found solid support once again at the $10. level and closed 28 cents per bushel higher at the close of the trading session. The resistance level of $10.40 was a clear obstacle as the rally stopped dead. 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 level and once we clear the $10.40 level a challenge of the $10.70 will be a tougher test.

All indicators are still negative, and the primary trend is still down.

Wheat

Faced with the lowest acreage planting numbers in a very long time, the CBOT March contract ran the stops above the $4.28 highs after the WASDE report. Later in the session prices retreated once again and settled at our resistance levels of $4.26, but still up 7 cents per bushel on the day. We received a red buy signal last week on the March weekly contract. This is a positive sign even if we pull back from these levels. The topic of the day was once again the HRS wheat as prices are completing our inverted head and shoulders we spoke of last month. Prices have gained more than 40 cents per bushel on the HRS March contract.

Meanwhile initial support is still seen on the March CBOT at the $4 level and overhead resistance is at $4.30 – $4.45. Both short and intermediate term indicators are now positive but the primary trend is still down.

Harvest 2017 crop cash prices as of close on January 11, 2017
SWW @ $176.19 ($4.80/bu), HRW @ $173.76/MT ($4.73/bu),
HRS @ $225.55/MT ($6.14/bu), SRW @ $178.60/MT ($4.86/bu).