Corn marking neutral base
March CBOT corn futures settled with a minor gain Friday, as the market trades within recent ranges. Over the past two weeks, March corn has carved out a sideways neutral range trade between resistance at $4.35 1/2 and support at $4.21. Overall action is lackluster and daily momentum tools are basically flat at neutral levels, which reveals the lack of a strong trend.
After a major year-plus long bear market corn, the March contract has shifted into a larger consolidative neutral phase. The sideways action started in mid November, and with the exception of a short-lived selloff in early January has largely traded between $4.17 and $4.40 3/4. That zone could mark the outside boundaries of a longer term consolidation or base trade that is developing in corn.
The longer term bear trend remains intact, but the daily chart shows it is taking a pause. A sustained rally over the $4.40 zone would be needed to confirm the start of a more significant upside correction.
$6.70 -- contract high $4.28 1/2 -- 10-day moving average $4.25 1/2 -- 20-day moving average $4.28 -- 40-day moving average $4.06 1/4 -- contract low
MARCH CBOT WHEAT, combined pit and electronic trading
March CBOT wheat closed lower Friday, but remained within recent ranges. The past two weeks have seen March wheat shift into a neutral, consolidative corrective phase, between resistance at the Jan. 14 high at $5.80 and contract low support at $5.60 1/2. The longer-term trend remains bearish. Despite recently oversold momentum, the bulls have failed to succeed in marking out significant gains to the upside. The market remains heavy. A decline under $5.60 1/2 would target a test of psychological support at $5.50. Conversely, the bulls would need to rally and close above $5.80 to open the door to more significant upside correction.
$9.12 1/4 -- contract high $5.68 1/2 -- 10-day moving average $5.84 1/2 -- 20-day moving average $6.11 1/2 -- 40-day moving average $5.60 1/2 -- contract low
MARCH KC WHEAT, combined pit and electronic trading
March Kansas wheat closed lower Friday, but failed to break new ground. Last week's action revealed that eager sellers remain waiting in the wings. Upside corrective activity has had difficulty taking hold. The long term trend is down, but for now the short-term trend remains corrective and sideways. On the upside, a strong ceiling of resistance lies at $6.51. Look for consolidative trade between major support at $6.17 and resistance at $6.51.
$9.50 3/4 -- contract high $6.25 1/2 -- 10-day moving average $6.33 -- 20-day moving average $6.57 -- 40-day moving average $6.17 -- contract low
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(END) Dow Jones Newswires
January 27, 2014 08:00 ET (13:00 GMT)