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Corn holds 20-day moving average support

12/10/2013 @ 7:45am

March CBOT corn futures gained moderately Monday, amid expectations that the U.S. Department of Agriculture will trim its domestic stockpiles estimate in a monthly supply-and-demand report due out Tuesday. Corn stockpiles are expected to be forecast at 1.861 billion bushels, less than the 1.887 billion projected in last month's USDA supply-and-demand report, but still more than double last year's 824 million bushels.

On the daily chart, the market has formed a minor bottom at the Dec. 2 low at $4.18 1/2. The major long-term trend remains solidly bearish, but the short-term trend has turned bullish. The market is holding above support at the 20-day moving average at $4.31 1/2, which nearly coincides with the Dec. 6 low at $4.30. That zone is important short-term support for the market and must hold to keep the near-term bullish bias intact. If support at the $4.31-$4.30 zone cracks, it would open the door for a quick test of the $4.18 1/2 low.

On the upside, the bulls are targeting a test of $4.49 1/2, the Nov. 12 swing high. That is resistance and a bullish objective near term.

  • $6.70 -- the contract high
  • $4.30 1/2 -- the 10-day moving average
  • $4.31 1/2 -- the 20-day moving average
  • $4.38 3/4 -- the 40-day moving average
  • $4.18 1/2 -- the contract low

MARCH CBOT WHEAT, combined pit and electronic trading

March CBOT wheat closed little changed Monday, but in the lower third of the daily range, which is a bearish position. The near-term trend is down and the longer-term trend is bearish as well. But a major floor of multimonth congestive support has built up just below the market. The bears are waiting in the wings for a chance to strike at major support at the contract low at $6.47 3/4, hit in mid-September. If a strong downside breakout were seen under $6.47 3/4 it would open the door for a fresh selling wave. If sustained losses were seen under that low, the bears would begin to eye a downside target at $6.27 1/4, the September weekly continuation chart low.

On the upside, minor resistance lies at $6.57 1/4 and then major resistance comes in at $6.74 3/4, the Dec. 2 swing high.

  • $9.12 1/4  -- the contract high
  • $6.59 1/4  -- the 10-day moving average
  • $6. 57 1/2 -- the 20-day moving average
  • $6.73 1/2  -- the 40-day moving average
  • $6.47 3/4  -- the contract low

MARCH KC WHEAT, combined pit and electronic trading

March Kansas wheat also closed little changed Monday, as the market is consolidating ahead of Tuesday's USDA report. The bears continue to eye a retest of $6.93 1/4, the new contract low hit Friday. The technical picture remains bearish. If the bears succeed in driving March Kansas wheat under the contract low, there is little support until the $6.74 area from the weekly continuation chart. The 10-day moving average continues to offer minor near-term resistance. Major nearby resistance lies at $7.16 1/4, the Dec. 2 high.

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