Grain Farmers of Ontario analyst Marty Hibbs says there were no surprises for the corn market in this week's WASDE report.
The GFO's weekly market commentary suggests we should start to see some upward movement if he market continues to hold it's $3.50 support level.
All the chart indicators for corn are negative and the main trend is still down.
Hibbs reports the soybeans continued to track sideways over the past week.
He believes the soybean market will eventually need to pick a direction and either fall sharply or begin an advance to higher prices - he's just not sure which way it's going to go.
The short term trend indicator for soybeans is neutral but the real trend is still negative.
With most of the bearish news absorbed in the wheat market and indicators showing several oversold signals, Hibbs suggests the market is getting closer to a descent rally.
He says it's just a matter of time before something spooks the market enough to scare the funds out of their short positions.
The GFO market commentary has both the medium and long term wheat market trends down.
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Grain Farmers of Ontario Market Commentary:
CORN
On the charts: The $3.50 support on the March contract held once again, and eventually we should start to see some upward movement if we continue to hold these areas. The January 12 WASDE report showed little in the way of surprises. This market is flat, and it should continue to be that way until we have an event capable of influencing these markets to do otherwise. Major support is seen at $3.45-$3.50, and again at $3.20. Overhead resistance stands at $3.80 and again at $4. All indicators are negative and the main trend is still down.
SOYBEANS
On the charts: The beans continued to track sideways, and even today’s WASDE report did little to indicate future direction. Our support at $8.40-$8.50 on the March contract held nicely, and we actually hit a minor overhead resistance at $8.80 before settling back to close at $8.74. Eventually this market will need to pick a direction and either fall sharply or begin an advance that will eventually lead to higher prices. Which one it decides is anyone’s guess, but it looks like today was a day for the funds to start unwinding their short positions which led to a brisk rally. In my mind, this could be a hint that some of the bearishness is starting to wane. Support is still seen in the $8.40-$8.50 area on the March charts, while the overhead resistance remains in the $9 vicinity. Although we have a neutral short term trend indicator, the real trend is still negative and will need a lot of work to turn this market around.
WHEAT
On the charts: Wheat has made four attempts at breaking below the $4.50 level over the past four months. To my way of thinking, what won’t go down will eventually start to rise. With most of the bearish news absorbed in the marketplace and our indicators showing several oversold signals, I feel we are getting closer to a descent rally. When that happens is anyone’s guess, but even if we don’t head higher I feel the downside at this level is limited. It is now just a matter of time before something spooks the market enough to scare the funds out of their short positions. Meanwhile, as I have said for the past two years, we continue to be in a bear market and need to treat them as such while looking for selling opportunities on rallies until the trend shows us that it has turned the corner. Support is seen at the $4.40-$4.50 level on March, while overhead resistance is at $5 and $5.25 on the lead month. Both the medium and long term trends remain down.
Grain Farmers of Ontario will be offering another series of marketing seminars across Ontario. This time we will be focusing on “Options” on Futures. The dates that we have confirmed so far include, (*New Liskeard, January 14;) (Belleville, January 26;) ( Avonmore, January 27;) (Chatham,(FULL) February 9;) (Stratford, February 10;) (London, February 11;) and (Brantford, February 25). If you would like to attend, go online at www.gfo.ca/seminars; phone Marty Hibbs at 519-767-4123; or email mhibbs@gfo.ca. Seminars are limited to 25 participants per location.
