Grain Farmers of Ontario analyst Marty Hibbs says there's a good chance the corn market will drop to the 3 dollars to 3.20 support level on the September contract.
That's significant because Hibbs says three dollars has been the major support for corn for the past 10 years.
The GFO weekly grain market commentary has all the indicators for corn still negative and the main trend down.
Hibbs points out soybeans are now entering a critical development time in the U-S midwest and weather anomalies could cause wild price fluctuations.
The commentary has the soybean market signals mixed - weekly indicators are positive, short-term negative and the main trend is down.
Hibbs reports the September wheat futures made new contract lows, violating a 10 year low before closing on the actual support line this week.
While he believes the market will reverse, he suggests it will be a slow grind higher.
The GFO commentary has all the wheat market indicators remaining negative and the main trend continues to be down.
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Grain Farmers of Ontario Market Commentary: (By Marty Hibbs)
CORN: The day after last week’s commentary, we got our bounce to the $3.75 level on the September contract that we spoke of - but it lasted all of one day. As of July 20 we have violated the July 4, long weekend lows of $3.39 on the September contract and closed below there at $3.37. We have now set the stage for a possible test of major support at the $3 - $3.20 level. This $3 area on the futures has the distinction of being major support for the past 10 years going back to 2006. With just 20 more cents to that price zone, I feel there is a good chance we may visit this major support of $3 - $3.20 on the September contract. Since our red sell signal on June 22, we have dropped almost a full dollar in price on the September contract. Indicators are still negative but we are getting divergence in several of these indicators, suggesting that a bounce may be overdue. All indicators are still negative and the main trend is still down.
SOYBEANS: Our $10.25 support level was tested on July 20 and so far it has held, closing just a little higher at $10.27. This of course is in-line with the other grains, as crop conditions improve and the chances of a weather market diminish each day that weather isn’t a serious issue. We are now entering a critical time for the soybean development in the mid-west and weather anomalies can cause wild fluctuations. The next obvious support is the big round $10 number which is within striking distance. This also represents a 60% retracement of the March 1 lows and the June 10 highs on the lead month contract. While major support is seen at $10, our overhead resistance is around the $10.75 with more trouble at the $11.50 area based on the September contract. Signals are still mixed, with weekly indicators still positive; while the short term is negative and the main trend continues to be down.
WHEAT: The September futures took out the July 4 long weekend lows of $4.15 and in the process made new contract lows for the September contract. This event violated a 10 year low before closing on the actual support line. There is not much to say here, except that the trend is and has been down for at least three years and until the main trend actually reverses, rallies have to be sold. From these levels we could see some upside; however, I feel it will be a slow grind higher as opposed to a typical reverse move. This bear market will take time to reverse a main trend from a technical basis. Major support is seen at $4 on September, and all of the indicators remain negative but oversold. The main trend continues to be down.
