Grains

As we discussed earlier this week of receiving short signals over the past week in wheat, soybeans and on Monday in the corn market. Tuesday may have caused at least a short term bottom to form in the grain markets as the USDA released their planting and stock report. The report proved to be very bullish for soybeans and some what bullish for corn and wheat. But in recent weeks it seems to be a common story for many commodities including crude and copper to rally. As many commodities are quoted in dollars, the dollar index peaked on March 4th and had a recent leg down since March 30th.

The USDA report was released at 8:30 am on Tuesday. When the grain markets opened at 10:30 am all of the grain markets opened strong. Corn (basis the May contract) then quickly sold off to $3.8125 after which it immediately turned around and later that day we received a long signal. Support for May corn is in the range of $3.88 to $3.94. Corn has reached its initial resistance level of $4.04. If the market continues to rally, the next level of resistance would be $4.17. With another level at $4.35 to $4.65.

On March 27th soybeans (basis the May contract) gave a sell signal. After bottoming on March 30th, the market gave a buy signal on April 2nd. In a matter of a few days, the market rallied about $1. The market may be getting a little tired as its reaching prices that have not been seen since early February. The market may find resistance between $9.85 to $10.13 as it settled today at $9.955. If it should rally above this level we could be looking for a price objective of initially $10.60 and then onto $11.30 to $11.40.

In an earlier posting we reported receiving a sell signal in wheat (basis May) on March 24. The market then spent several days testing lows made on March 3rd. On April 2nd we received a buy signal. As wheat settled today at $5.6350, it may be nearing the first level of resistance of $5.71 to $5.86 and possibly $5.95. If the rally continues, the next level of resistance would be $6.19 and possibly pushing to the $6.45 to $6.73.