Lots of talk about bear markets in this week's Grain Farmers of Ontario weekly market commentary.
Analyst Marty Hibbs says the corn, soybean and wheat markets are all in bear mode.
He's got soybean support around the 8.40 to 8.60 level on the September contract and is still calling any price rallies above 9 dollars selling opportunities.
Hibbs suggests all the indicators continue to point to a multi-year bear market for soybeans.
For corn, the GFO analyst puts solid support at the 3.20 level on the September contract, with all indicators still negative.
For wheat, there's short-term overhead resistance at the 5 dollar area on the December contract.
He says all wheat market indicators are still negative.
Hibbs says there's some concern about the quality of the U-S soft red winter wheat harvest.
He quotes the U-S Wheat Associates as advising buyers to ensure their purchases meet their expectations.
According to Hibbs, this year's unusually wet weather is what's causing those quality concerns.
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Grain Farmers of Ontario Market Commentary:
CORN: Corn progress continued to be just a couple percentage points behind 2014 and the five-year average during the week of August 24 to 28, according to the U.S. Department of Agriculture (USDA) National Agricultural Statistics Service. Corn condition was rated at 77 per cent good to excellent, 18 per cent fair and five per cent poor or very poor, with 91 per cent at dough stage and 59 per cent dented. On the charts: We are approaching our $3.50 support level on the September contract as of September 2. The weekly charts show solid support at the $3.20 level and minor support at the $3.50 level both based on the September contract prices. All indicators are still negative, and the market is still in bear mode. Failure to hold these levels could result in a test of the $3.20 level based on the lead month. All indicators are still negative and the trend remains down.
SOYBEANS: According to the USDA National Agricultural Statistics Service, soybeans were rated 74 per cent good to excellent, 20 per cent fair and six per cent poor or very poor, with 96 per cent setting pods and 10 per cent dropping leaves. On the charts: As anticipated, the break below the important $9 support level has caused additional weakness in the market. Our first line of support on the technical front is around the $8.40 to $8.60 level based on the lead month contract which is still September. We have switched to the November contract for pricing but we still use the September numbers for analysis until the contract expires, which is later this month. We should consider rallies back above $9 as selling opportunities until we find reason to do otherwise. All indicators are still negative and continue to point to a multi-year bear market.
WHEAT: The poor quality, as well as quantity, of the U.S. soft red winter wheat harvest was evident when comparing data of more than 20 years. U.S. Wheat Associates advised buyers "to ensure that their purchases [of U.S. soft red winter wheat] meet their expectations." This was pointed out after crop concerns arose from this year’s unusually wet weather. On the charts: The slide continues on the futures contract as we approach our anticipated $4.60 support line based on the weekly futures contract. As of September 2, we are currently trading at $4.70 on the September contract which will determine the weekly chart price until its expiry later this month. Short term overhead resistance is seen at the $5 area on the December contract while major resistance stands at the $5.35 area. We are now quoting the December contract for pricing purposes, however, we will continue to monitor the September contract for technical analysis for the weekly charts. All indicators are still negative, however, we are getting into oversold territory and any washout in prices in the coming weeks could signal a change of the guard. For now, we need to remember that this is still a bear market.
Marty Hibbs, Grain Farmers of Ontario
