August 4, 2009
Technical Analysis: US corn, wheat futures
December corn posted a strong rally Friday (July 31). The technical picture is improving and the bulls are setting up for a test of key near-term resistance this week.
The market settled just above the July 15 high at US$3.49 1/4 on Friday. That is the key support level to watch on Monday. If sustained gains can be achieved above that level, it would suggest that a bottom is forming on the daily chart.
The corn bulls' next upside price objective is to push prices above solid technical resistance at $3.56 3/4 a bushel, which would fill on the upside a downside price gap on the daily bar chart.
The next downside price objective for the bears is to push and close prices below solid technical support at the contract low of US$3.14 3/4 a bushel.
First resistance for December corn is seen at Friday's high of US$3.50 and then at US$3.56 3/4. First support is seen at US$3.40 and then US$3.35.
US$3.14 3/4 --- the contract low
December Chicago wheat posted a strong close Friday, ending the day at session highs. Wheat bears still have the solid overall near-term technical advantage. Prices have been trading sideways at lower levels for four weeks.
The next downside price objective for the bears is pushing and closing prices below major psychological support at US$5.00. Bulls' next upside price objective is to push and close December futures prices above solid technical resistance at the July high of US$5.79 1/2 a bushel.
First resistance is seen at US$5.60 and then at US$5.79 1/2. First support lies at US$5.43 and then at last week's low of US$5.33 1/2.
US$4.91 ------- the contract low
December Kansas City Board of Trade wheat closed firmer Friday, at session highs. In recent weeks, the market has been locked in a sideways neutral trading range.
The bulls' next upside price objective is pushing prices above solid technical resistance from the top of that sideways range at US$5.92. The bears' next downside objective is pushing and closing prices below solid technical support at the range bottom at US$5.58 1/4.
First resistance is seen at US$5.78 and then at US$5.90. First support is seen at US$5.65 and then at US$5.58 1/2.
US$5.49 1/2 --- the contract low
