Technically Speaking: Corn | Soybeans | Wheat

Weekly technical analysis of corn, soybeans and wheat

Darin Newsom - DTN Senior Analyst,
May 7, 2018

Corn

Cash: The DTN National Corn Index (NCI, national average cash price) closed at $3.70, up 11 cents for the week. The NCI extended its secondary (intermediate-term) uptrend last week. Next resistance is at $7.73, a price that marks the 76.4% retracement level of the sell-off from $4.01 (week of June 13, 2016) through the low of $2.85 (week of August 22, 2016). National average basis firmed 3 cents last week, calculated at 36 cents under the July futures contract last Friday.

The NCI extended its secondary (intermediate-term) uptrend last week

Old-crop Futures: The July 2018 contract closed 7.75 cents higher at $4.06 1/4. The contract extended its secondary (intermediate-term) uptrend last week to a high of $4.08 1/4. However, the sell-off seen late in the week took July corn back below resistance near $4.06 3/4, a price that marks the 61.8% retracement level of the previous downtrend from $4.34 1/4 through the low of $3.62. Given weekly stochastics remain above the overbought level of 80%, the contract is vulnerable to establishing an earlier than normal seasonal high and move into a secondary downtrend.

New-crop Futures: The December 2018 contract closed 6.50 cents higher at $4.21. New-crop December corn extended its seasonal uptrend to a new high of $4.22 3/4 last week. However, weekly stochastics are nearing 90%, indicating a sharply overbought situation and in position for a potential bearish crossover. This would again signal a possible move to a secondary (intermediate-term) downtrend.

Soybeans

Cash: The DTN National Soybean Index (NSI, national average cash price) closed at $9.64, down 14 cents for the week. It could be argued that cash soybeans remain in a secondary (intermediate-term) 3-wave downtrend, with the recent high weekly close of $9.83 (week of April 9) the peak of Wave B (second wave). Confirmation of this would be a weekly close below the Wave A (first wave) low weekly close of $9.50 (week of March 19).

Old-crop Futures: The July contract closed at $10.36 3/4, down 19 1/2 cents for the week. July soybeans remains in a wide-ranging secondary (intermediate-term) sideways trend with boundaries of $9.65 1/4 (low the week of January 8) and $10.90 1/4 (high the week of February 26). The contract continues to hold in the upper-half of this range, or above $10.27 3/4 while weekly stochastics remain neutral-to-bearish below the overbought level of 80%.

New-crop Futures: The November 2018 contract closed at $10.37 1/4, down 9 3/4 cents for the week. November soybeans remain in a secondary (intermediate-term) 3-wave downtrend. The week of April 2 saw the contract post a bearish reversal that included a new high of $10.60 before a lower weekly close. This price marks the peak of the previous 5-wave uptrend from the low of $9.23 1/2 (week of June 19, 2017). Last week’s high of $10.57 3/4 looks to be the Wave B (second wave) peak, with Wave C expected to move below the low of Wave A (first wave) at $10.25.

SRW Wheat

Cash: The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.94, up 29 cents for the week. Looking at the trends of the SR.X again, it could be argued that cash SRW is in Wave 5 of s secondary (intermediate-term) 5-wave uptrend. Last week’s settlement of $4.94 puts it within striking distance of the previous high of $5.02 (week of July 3, 2017). The market is vulnerable to the establishment of a secondary downtrend, given the series of bearish crossovers above the overbought level of 80% by weekly stochastics.

The DTN National SRW Wheat Index (SR.X, national average cash price) closed at $4.94, up 29 cents for the week

New-crop Futures: The Chicago July 2018 contract closed at $5.26 1/4, up 27 3/4 cents for the week. July Chicago wheat posted a new high of $5.38 1/2 for this move last week, moving toward a test of resistance near $5.43 1/2. Given this new high, the market remains vulnerable to a move to a secondary (intermediate-term) downtrend making last week’s high the peak of the previous 5-wave uptrend.

HRW Wheat

Cash: The DTN National HRW Wheat Index (HW.X, national average cash price) closed at $5.10 up 34 cents for the week. Cash HRW wheat extended its secondary (intermediate-term) uptrend, settling at its highest level since July 2015 last week. Though no topping patterns have been established on the weekly close-only chart, the strength of the rally in cash HRW increases its vulnerability to increased selling.

New-crop Futures: The Kansas City July 2018 contract closed at $5.55 3/4, up 25 1/4 cents for the week. July KC wheat posted a bullish breakout last week, moving to a new high on its weekly chart that could signal the peak of Wave 5 of its secondary (intermediate-term) 5-wave uptrend. The contract once again found resistance near $5.62 3/4, last week’s high was $5.68 1/2, with the former the 67% retracement level of the previous downtrend from $6.23 through the low of $4.40 1/4. The contract’s minor (short-term) trend on its daily chart turned down late last week.

HRS Wheat

Cash: The DTN HRS Wheat Index (SW.X, national average cash price) closed at $6.11, up 15 cents for the week. The secondary (intermediate-term) trend for cash spring wheat could still be considered sideways. Though it has moved outside its previous range from $5.82 to $6.05, it remains within the wider range between $6.19 (close the week of November 6, 2017) and $5.62 (week of March 26). A breakout in either direction would establish the next trend.

New-Crop Futures: The Minneapolis September 2018 contract closed at $6.29, up 14 3/4 cents for the week. The contract looks to be in a wide ranging sideways pattern between the recent low of $5.88 1/4 and the recent high of $6.47.

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