World Perspectives
feed-grains soy-oilseeds wheat

Technical Views - Interesting Wheat Situation

SPREADS

March crush falls to 68c/bu while oilshare falls to 32.77%.   Corn spreads remain firm in front of the report, with July/Dec trading to 57 1/2c from 51 1/4c, and March/May trading from 1/2c to 1 1/4c carry.  March/May wheat trades from 1c to 2 1/2c carry.  March wheat/corn trades from 1.37c up to 1.53c.  March/May beans trades up to 4 1/4c inverses from 2 1/2c, while March/May meal trades up to $4.10 inverse from $2.40.

PALM OIL

March down 33 ringgits.   Malaysian inventories in Dec. plunged to 1.26 mmt, its lowest in more than 13 years, but is expected to rebound to 2 mmt by the end of 20/21.  Intertek estimated Malaysian exports for Jan 1-10 at 260,080 mt, down 35% from Dec. 1-10 time period. 

NEWS

Stocks are down 280 pts with crude oil trading to lows of $51.55/barrel.  The US dollar firms to 90.64. 

CALLS

Calls are as follows:

beans: 6-8 higher

meal:  4.00-4.50 higher

soyoil:  35-45 lower

corn:  steady/firm

wheat:  4-6 higher

canola:  1.20-1.50 higher

BUSINESS

USDA announced 132,000 mt of beans sold to China for 20/21

USDA announced 108,500 mt of corn sold to Colombia for 20/21

TECHNICALS

March Corn:  Overall trading range is from $4.80 to $5.02 3/4.  An uptrend channel has been established, with key support close to the lows of the PM session at $4.90 1/2.  Therefore, it would be problematic for the rally if prices started to trade below the uptrend channel support line, indicating that a further corrective sell-off towards $4.85 would be in place.  The market broke into the close, and it feels as though the market is a bit heavy in terms of price action.  If long and prices violated $4.90, look for more corrective downside.

key trendline support: $4.89-$4.91

resistance:  $4.98/$5.03

possible range; much the same

March Wheat:  Interesting trade so far, as prices attempted to move through major support at $6.30 finding little down-side follow-through.  So far, the price action sports an outside day of trade with a higher close.  Support moves back to $6.35, and resistance for the day back to $6.55.  Very strong support on a larger break would be noted at the 20-day moving average of $6.25, with trendline at $6.20, which may have been the reason for the bounce.  At any rate, if short would have to cover until prices can clearly break support lines of $6.20, which opens the door for a major pullback to $6.00.  

first support: $6.35/$6.38

resistance:  $6.50/$6.52

possible range: much the same or lower

March Beans:  The bull market price action continues with a new contracttr high this AM at $13.88 3/4, which is testing the top of an ascending triangle formation.  Ascending triangles are positive formations, and trading over $13.90 would be extremely bullish price action, increasing the chance for a $14.00 trade.  First support moves up to $13.70, and trendline resistance is at the ctr highs.  On a firm note, would look to challenge $13.90 to $14.00.

first support: $13.70/$13.72

resistance:  $13.85-$13.92

possible range: much the same or higher

March Soyoil:  The market is working on a trading range, with lower support at 43c violated for a test underneath.  Key support under the market is located at 4265c-4280c.  On a weaker start would look for prices to test 43c to see if it can hold, but think we probably take another peak at lower support under this level.  Look for a 42c-45c trading range to eventually emerge.

first support: 4280c-43c

resistance:  4340c

possible range: much the same

March Meal:  Prices hit a new contract high at $445.80, leaving the door open to further advances.  Trendline resistance at a new high would be close by at $448.80.  Prices begin on a firmer note with first support moving up to the previous ctr high now turned support at $442.00.  New highs beget new highs, and there is no sign of a market top.

first support: $442.00

resistance:  $445.00-$448.00

possible range: much the same or lower

MARCH WHEAT

While corn and beans continue to work higher, the wheat chart has a slightly different look, with the peak high at $6.64 1/2 (ctr high), leading to a price break down towards the low end of the trading range at $6.30.  THe break of $6.30 found stops, but no follow-through. The ADX trend is weak at only 24, (anything under 25 is weak trend), which is why the market continues to find a lack of follow-through at tops and bottoms, making it a good market to straddle or strangle.    If wanting to sell one of the markets, technically this one is the weakest, though would refrain from selling until a break of trendline support at $6.30 comes to pass.  A move under trendline at $6.20 would promote a break testing $6.00.  Could also straddle/strangle a $6.00-$6.50 trading range.

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