Marty Hibbs says there was what he termed an 'outside day reversal' in the grain markets Monday.
The Grain Farmers of Ontario analyst says that's a technical indicator which usually comes before a market turn.
However, Hibbs says he needs a stronger indicator before he gets too excited about the corn market right now.
With soybeans, he now has the short term indicators neutral while the weekly and monthly indicators remain quite bearish.
This week's GFO market commentary suggests soybeans need to get past the 9 dollar level for the market to get some traction.
For wheat, Hibbs says all the indicators remain negative and the main trend is still down.
He points out the market is now sitting at the 4.75 to 4.80 support line and if wheat closes below that it could test the important 4.50 to 4.60 level.
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Grain Farmers of Ontario Weekly Market Commentary: By Marty Hibbs
CORN On the charts, Monday, November 23 gave us a glimmer of hope for an upward move. This hope came in all three of our grain markets in the form of an outside day reversal. The technical indicator is usually a prelude to a market turn but in this case I think it may need a lot stronger indicator before I get too excited. Meanwhile, the December contract is coming into first notice day on Monday, November 30 and we will be switching to the March 2016 contract at that time.
SOYBEANS On the charts, after witnessing an outside key reversal on Monday, November 23, there was no follow through the following day as prices were flat. However, on Wednesday, November 25, the strength continued as the January contract extended gains by 30 cents since Monday closing at $8.75 on the January Chicago futures. The two price points that we need to surpass to get some traction at this point are the infamous $9 level followed by an even tougher $9.40 level based on the January contract. The $8.50 support line continues to be the main support level, while a close below that level would suggest a possible move to the $8 level or even down to the 2008 low of $7.75 based on the lead month contract. Short term indicators are now neutral while the weekly and monthly indicators are still quite bearish.
WHEAT On the charts, in the case of the wheat’s outside day reversal, the outcome was not as promising. After following the other grains and opening lower to close higher with an outside day reversal on Monday, November 23, the Chicago wheat lost its gains and actually closed lower than it had all week. We are now sitting back at our $4.75- $4.80 support line as of November 25. If we close below this area then a re-test of the important $4.50- $4.60 seems possible. There is a caveat to this scenario and that is the fact that corn and soybeans and even the Minneapolis wheat held their support after the reversal day. Below the $4.50 level our next floor seems to be a test of the $4 level based on the lead month contract. Overhead resistance is now at $5 and again at $5.30 on the lead month contract. We will be switching over to March starting the week of November 30. All indicators remain negative, and the main trend is still down.
