NO CONFIRMATION OF HIGHER OR LOWER PRICES IN GRAINS

Written By Sebastian Frost

AUDIO COMMENTARY

  • Wheat market roars back from lows

  • Soybeans hold $12

  • No confirmation of higher or lower prices

  • We need to close above or below certain levels

  • Some charts below

  • Need to have some friendly catalysts that might take time to develop

  • We apologize for the short update today, we will have a great write up tomorrow and normal length updates next week.

CHARTS

Corn 🌽

We didn’t make new lows or take out yesterdays lows which is good. But we also failed to take out the past two highs as well.

The funds and algos are going to drive us here. If we can take out the recent highs and get a break above $4.53, my next target is $4.60. So if you need to price something in the next few weeks that wouldn’t be a bad target.

Longer term I think we can crawl but up to the $4.90 to $5.00 range, but it might take time. If we cannot hold the recent lows, there is still a chance we go lower. If we take out the recent lows we likely look to drop to $4.30.

Also take note of the long term downward trendline. If we can bust above, it could cause some technical buying. It looks like we have found some consolation here but for now we remain in a downtrend. We will need a catalyst or for the funds to just say enough is enough. Keep in mind, the funds are holding record large shorts. What happens when they decide to cover? They will have a lot of buying to make up. The question is how low do we go before they cover?

If you have risk management questions or want specific advice please shoot us a call or text (605)295-3100

Soybeans 🌱

Overall, yes today was disappointing for bulls. We had two strong days of price action and clear signs of reversals. Yet the South America weather headlines gave most of the rally back.

On the bright side, we did manage to hold $12 which is good. If we cannot hold $12 there is a good chance it triggers more selling and we could look to test $11.75. If that level doesn’t hold? Our summer lows of $11.45. Still a big pocket of air below $12 and something to keep in mind.

On the flip side, if we can crawl back and take out yesterdays highs it could bring on more buying. My first target if we can do so is $12.48 and our highs from a week ago. If we can get back to those levels, $13 doesn’t seem that far away. We still have a gap that needs filled from new years as well at $12.98.

But for now, we are in a clear downward trend and do not have confirmation we have broken that trend. If we could take out $12.48 I would look at that as solid confirmation. But until then, we will have to see where the funds and headlines want to push this thing. We are heavily oversold and I think we will be higher eventually, but that doesn’t mean we can’t go lower until then.

If you have questions if this is a spot where you should be looking at putting in a floor or utilizing courage calls etc please give us a call (605)295-3100. Because everyone should be doing something different.

Wheat 🌾

One day we are higher, the next we are lower. Right now we are stuck in no mans land in the middle of this brutal range.

The wheat chart doesn’t look all that bad. We have closed well off our lows the past few days in a row. If we could take out last weeks highs of $6.16 which is also our 24% retracement level from our lows to our highs, it could very well bring more short covering and technical buying. If we were to do so, my next target would be $6.38. If we got to that level it would be a great sign of higher prices and get the bulls excited.

Take note of the triangle we are in. A break past any of those blue lines could cause some moves higher or lower depending which way we go.

Want to Talk?

Our phones are open 24/7 for you guys if you ever need anything or want to discuss your operation.

(605) 295-3100

sfrost@dailymarketminute.com

Sebastian Frost
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