Grain Farmers of Ontario analyst Marty Hibbs suggests the large corn price drop after the latest USDA crop carry-out figures were released may have been the low for the market.
HIbbs points out the price has since rallied with the $3.85 to $4 level now being tested.
He says if the market can close convincingly above that 4 dollar market we could be negating a two year old trend line on the weekly chart.
This week's GFO market commentary has short term corn indicators turning positive while the long term remains down.
Hibbs reports we could see a realistic shot at the $10.50 resistance level for soybeans on the lead month contract.
He's got the weekly chart indicators still positive.
However, Hibbs cautions the charts still see the soybeans in a long term down trend.
And the weekly commentary says the wheat market is challenging it's biggest resistance so far this year - the 5 to 5.50 price on the May contract.
If the market clears the 5.50 mark, Hibbs thinks we may have a market bull on our hands.
The GFO commentary has daily chart indicators for wheat positive, weekly signals neutral and the main trend still signalling a bear market.
===
Grain Market Commentary Weekly commentary is written by Marty Hibbs, Grain Farmers of Ontario.
CORN
It looks as though we have witnessed a reversal on negative news, a scenario that is quite common in the grain markets over the years.. The huge carry-out sent the corn market lower by fifteen cents and establishing what seems to be the bottom for the time being. Although it may be too early to call, the large drop after the report was the low since the report was released. We have since rallied forty-five cents per bushel, and we have received another buy signal on our charts. Our overhead resistance at the $3.85- $4 level is now being tested, and if we can close convincingly above $4, we would be negating a two year old trend line on our weekly chart. Next week is closing in on the first notice day for the May contract, so I will be switching my commentary analysis to the July chart as of April 27. Short term indicators have turned positive, but the long term trend is still down.
SOYBEANS
Beans are leading the charge to the upside in the grains since the WASDE report on March 31. We have gained a full dollar per bushel. We have actually seen our upside target of $10-$10.50 per bushel challenged as of this writing on April 20. From here we could see a brief pullback, and then a possible shot at a close above the $10.50 level, which should present more of a challenge. As I have mentioned many times during the winter months, a $2 rally in the beans would only be viewed as a bear market rally. The funds short liquidation would be enough to drive this market to the $10.50 levels on the May contract. We flashed a medium term buy signal last week, and for that reason it looks like we could see a realistic shot at the $10.50 resistance level on the lead month contract. If the driving forces behind this rally were to persist, it would still take a lot of work to actually turn this market into a bull market. From the long term charts, we could actually see another $1-2 rally from these levels and still see our confirmed signal for a bull market. Meanwhile, the $8.50 bottom seems to be in, and the $10.50 resistance should provide a nice trading range for the next few weeks. The weekly indicators are still positive, and our next challenge is to clear the $10.50 ceiling. Remember that this rally is encouraging, but the charts still see the soybeans in a long term down trend until we see significant upside movement.
WHEAT
Unlike the other crops, the initial reaction to the March 31 report was negative for a week after the report. We managed to pull back to re-check the support at $4.45, and only then did we challenge and remove the initial overhead resistance line at $4.80. Today, we are challenging our biggest resistance so far this year: the $5-$5.50 price on the Chicago May futures contract. This area has serious resistance until we clear the $5.50 price on the lead month contract. If we can manage that, we just may have a market bull on our hands. But before we get ahead of ourselves, let’s look at the trouble spots. Daily indicators are positive while the weekly signals are neutral and of course the main trend still signals a bear market. The best cure for a bear market is higher highs over a period of time. Resistance is seen initially at the $5.10 level and again at the $5.25-$5.50 level, while support is seen back at our $4.40 price on the lead month contract.
