Oversold seems to be the word of the week for the Grain Farmers of Ontario's market commentary.
Analyst Marty Hibbs says soybeans and wheat indicators are both negative and oversold and the corn indicators are getting into the extremely oversold zone.
He points out corn is still in the major support zone of 3 dollars to 3.20 a bushel.
Soybeans are trading sideways in the $9.75 to $10.25 zone for the September contract.
And the $4 support level for wheat on the September contract is holding.
Hibbs suggests today's USDA report will have a lot to say about where all three of those markets go from here.
In the case of wheat, the GFO analyst says the report could prompt a re-test of the $4 level again.
He says if traders run the stops, then close higher on the day, it may be a short term bottom.
If that happens, Hibbs thinks wheat could be set up for at least a decent rally for a couple of weeks.
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Grain Market Commentary Weekly commentary is written by Marty Hibbs, Grain Farmers of Ontario.
August 10, 2016
CORN Corn is still in our major support zone of $3 - $3.20; and although the charts look bad, there should be continue support until at least the next United States Department of Agriculture (USDA) report scheduled for release on August 12. There is not much new to report here except that the news is mostly all bearish and at some point it will stop having any effect on lowering prices. Generally, harvest time is when we see the most pressure on the cash price and this is definitely one of those years. Meanwhile, this is a multi-year bear market and it must be respected as such. All indicators are still negative and the main trend is still down, but we must add that these market indicators are getting in the extremely oversold zone and eventually we will see a reversal. The key is we don’t know when or from what level.
SOYBEANS We are now tracking the September contract on soybeans as they continue to trade sideways in our support zone of $9.75 - $10.25 on the September contract. There is not much to report here except that the month of August could provide the tipping point for the price going forward. If the USDA report this month confirms expected yields, we could see a move back towards the $8.50 bottom in the coming months, but if there is a surprise in the USDA’s reporting, we could see a move higher towards the $11 price for the September contract. While support is seen at $9.75 - $10, our overhead resistance is around $10.30 - $10.50 on the September contract. Our indicators are oversold. Signals are still mixed but the main trend is still down.
WHEAT Since our last report, the $4 level on the Chicago September futures has held. With the USDA report on August 12, we could see a retest of the $4 level once again and if we run the stops and close higher on the day, it may in fact be a short term bottom. If we get that, we could be set up for at least a descent rally for a couple of weeks. But that is only speculation at this point. First we need to see if the current bottom holds on a close only. Meanwhile, we have seen a few daily indicators turning positive, but that is not a strong signal. Good support is still seen at $4 on close based on the September contract. The indicators remain negative but oversold. The main trend continues to be down.
