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Have the corn, soybean price trends changed, analyst asks

Harvest yield reports will be important to watch.

Have the price trends changed for the corn and soybean markets? That is the big question this week.

Last Friday, the corn and soybean markets posted an impressive chart reversal. Both markets have posted impressive follow-through early this week.

Here are three chart signals that I see as being positive for price:

  1. The key reversal higher that occurred last Friday.  
  2. The follow-through this week with corn and soybeans trading above the Friday high.
  3. The orderly stair-step rally this week. We have had narrower daily trading ranges this week, and it looks like this week the charts will show a Monday low and a Thursday or Friday high.

As a result, I am not super bullish. However, look for a basing-type of market to develop that we often see as we enter harvest. I often watch for the market charts to put in what I call a series of M’s or W’s.

For December, the key support price for the corn market is at the Friday low at $4.97, with resistance at the 50-day moving average at $5.44.

For November soybeans, key support is at the Friday low at $12.76, with resistance at the 50-day moving average at $13.31.

Here are three key fundamentals to watch next week. 

  1. Will the rain that’s in the forecast for central Brazil finally develop? So far this year, the actual rainfall amounts have consistently been lower than the forecasts called for. This is the same troubling pattern that developed last year. 
  2. Will China start to buy more soybeans from the U.S.? It has been buying some, but the amounts are way below last year. As the Gulf slowly re-opens, I would like to see more purchases of soybeans, and maybe China will start with corn?
  3. More yield reports as harvest expands across the Corn Belt. The yields have been extremely variable, and as we enter late September we should get a better handle on whether the USDA will raise or lower the national yield of corn and soybeans in the October USDA Crop Production report. 

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For more information, go to kluiscommodities.com.

Please note: An investment in futures contracts is speculative, involves a high degree of risk, and is suitable only for persons who can assume the risk of loss in excess of their margin deposits — only genuine “risk” funds should be used in such trading. 

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