GFO: Short Term Wheat Indicators Turned Negative This WeekOctober 22, 2015 8:44am
Grain Farmers of Ontario analyst Marty Hibbs says the 3.70 level for the December corn contract is important.
Hibbs says the market needs to hold that level or we could see another test of the 3.60 level – which would be a 60 per cent pullback from the weekly chart 4 dollar high made back on September 4th.
GFO has major overhead resistance for corn at 4 dollars and support at the 3.50 level, based on the lead month contract.
Hibbs puts major support for soybeans at the 8.60 level on the November contract, with overhead resistance at 9.50.
He says short term soybean chart indicators are neutral while the main trend remains negative.
And this week’s GFO commentary suggests the 4.50 support level should hold for wheat.
Hibbs has major resistance at the 5.75 to 6 dollar levels on the December wheat contract.
He also reports that short term wheat chart indicators turned negative this week.
Grain Farmers of Ontario Weekly Market Commentary:
On the charts: The $3.70 level on the December corn mentioned last week is being tested as of this writing on October 21. The grains have all drifted lower over the past week and are approaching support levels. In the case of corn, we need to hold this area or we will see another test of the $3.60 level. This equates to a 60 per cent pullback from the $4 highs on the weekly chart made back on September 4. This break in prices has negated our head and shoulders formation on the daily chart, and if we don’t find support in the $3.70 level, a retest of the bottom around $3.50 is looking very possible in the coming weeks. Major overhead resistance is still at $4 with support at the $3.50 level based on the lead month contract. Medium term indicators are neutral while the main trend is still down.
On the charts: The November soybean contract saw prices retreat from last week’s high of $9.25 a bushel. The gap on the weekly chart around $9.35-$9.45 has not been filled so we could see another attempt at that target. Overhead resistance is still at the $9.50 level while initial support is seen at $8.80. Major support is seen at the $8.60 level on the November contract, which will expire for speculators October 30. We will then move to the January 16 contract. Short term indicators are neutral, while the main trend remains negative.
On the charts: Like its counterparts, wheat had a negative week with the nearby contract, losing about 25 cents per bushel since last week’s report. According to the technician’s point of view, this means we are getting ready to see the $4.60 and possibly $4.50 levels on the December futures tested within the next month or two. This $4.50 is an important level and should hold. The charts don’t offer much support below these levels until we approach $4.25 and $4.00.
Short term indicators turned negative this week continuing the three year down-trend. Solid support is seen at the $4.50-$4.60 levels while major resistance is seen at the $5.75 -$6 levels based on the December contract.