This week's Grain Farmers of Ontario market commentary suggests the November 27th key reversal in the soybean market may just be a bottom - for now.
The commentary cautions that even though the market looks strong at the moment, it will take a lot of work to turn this market around.
GFO has short term soybean indicators now neutral while the weekly and monthly indicators are still quite bearish.
The commentary reports corn prices have been very quiet.
It has market indicators negative by all accounts and suggests it should be viewed as such until we see proof of a sustained reversal.
GFO also has all the wheat market indicators negative and the main trend still down.
According to the commentary, overhead wheat price resistance is at 5 dollars on the March contract with support at 4.50.
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Grain Farmers of Ontario Weekly Market Commentary:
CORN: On the charts: Corn prices have been very quiet. The $3.50 - $3.60 levels on the March contract held nicely and our immediate overhead resistance is now somewhere around $3.75 on the March contract providing we don’t make new lows first. Major resistance is around the $4 level and our support levels are still at $3.50 and $3.20. The market indicators are negative by all accounts and should be viewed as such until we see proof of a sustained reversal.
SOYBEANS: On the charts: The key reversal seen on November 27 looks like it may just be a bottom for now. This past week has seen a 50 cent move to the upside from the Nov 27 low of $8.44 a bushel on the January contract. The next major hurdle is clearing the $9-level with a convincing close above $9.05. It is important to remember that even though the market looks strong at the moment, it will take a lot of work to turn this market around. Hopefully this could be the beginning of something positive. The two price points that we need to surpass to get some traction at this point are the $9.40 - $9.50 level based on the January contract. The recent low of $8.45 - $8.50 is now the main support. Short term indicators are now neutral while the weekly and monthly indicators are still quite bearish.
WHEAT: On the charts: We are currently trading the March contract but with the December contract approaching expiry we will look at both the December and March contracts for our charting analysis. Last week we noted that a close below our $4.80 support line on December could lead to a re-test of the $4.50 support. As of December 2, we were sitting at $4.51 on the December contract. The next line of support will come at $4.25 and $4.00 on December. Even if we get a sell-off on December, this should equate to March finding support at $4.50 as March is trading at a 16 cent premium to the December contract. Overhead resistance is now at $5 and again at $5.30 on the March contract while support is seen at $4.50. All indicators remain negative, and the main trend is still down.
