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Buyers emerge on corn contract lows

01/06/2014 @ 7:08am

March CBOT corn futures ended Friday higher after touching a new contract low intraday. However, March corn futures posted minor losses on the weekly chart. The primary trend remains solidly bearish for corn. Friday's action likely was registered on light holiday week volume and fueled by preweekend profit taking. Nonetheless, Friday's session marks a minor bullish reversal day.

For now, the $4.17 low stands as support. Overall, rallies in recent months have been shallow and short-lived. Even the December rally proved to have weak legs. Near-term corrective probing higher could unfold, but initial resistance lies at the $4.36 swing high hit Dec. 23, and beyond that a stronger ceiling comes in at $4.40 3/4, the Dec. 10 swing high. On the downside, if the contract low at $4.17 falls, the bears will target a test of $4.10 1/2, the Dec. 6 weekly low on the continuation chart and then the $4.00 level.

  • $6.70     -- the contract high
  • $4.27 1/2 -- the 10-day moving average
  • $4.29 1/2 -- the 20-day moving average
  • $4.30 1/2 -- the 40-day moving average
  • $4.18 1/2 -- the contract low

MARCH CBOT WHEAT, combined pit and electronic trading

March CBOT wheat rebounded Friday. The market has been in an extended selloff phase and had reached extremely oversold levels. The technical trend is solidly bearish. The market is ripe for a period of consolidation and correction.

Initial resistance lies at $6.10. Sustained gains and a close above that zone would be needed to suggest a minor bottom could be forming. On the downside, if initial support at last week's low at $5.95 falls, the bears will press for a quick test of $5.91 1/4, the May 2012 weekly low.

  • $9.12 1/4 -- the contract high
  • $6.06 1/4 -- the 10-day moving average
  • $6.20 1/2 -- the 20-day moving average
  • $6.39 3/4 -- the 40-day moving average
  • $5.95     -- the contract low

MARCH KC WHEAT, combined pit and electronic trading

March Kansas wheat bounced Friday, as profit taking set in after the recent bearish rout. The market has been in an accelerated selling phase and has hit extremely oversold levels. Support now lies at the contract low hit last week at $6.30 1/4. If the market can stabilize above that floor, a period of consolidation or correction should unfold. All trends are bearish. But, the market is oversold and vulnerable to a correction at any time. On the upside, the 10-day moving average continues to offers initial resistance and stood at $6.44 1/4 on Friday.

  • $9.50 3/4 -- the contract high
  • $6.44 1/4 -- the 10-day moving average
  • $6.61 1/2 -- the 20-day moving average
  • $6.83     -- the 40-day moving average
  • $6.30 1/4 -- the contract low

Write to Kira Brecht at copydesk@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
January 06, 2014 08:00 ET (13:00 GMT)
DJ Buyers Emerge on Corn's New Contract Low -- Technical Analysis->copyright

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