Weekly commentary is written by Marty Hibbs, Grain Farmers of Ontario.
All of these reports include a weekly Ontario Wheat Market Commentary for the current season. Ontario Corn and Soybean Commentaries are also included; reflecting the overall Grain Farmers of Ontario perspective.
September 21, 2016
|| 18 cents
|| 30 cents
|| 05 cents
|| 03 cents
|| 04 cents
|| 02 cents
|| 0.53 points
Even though we moved sideways once again on the December corn futures, the charts are building an impressive base at these levels. As you recall, back in August, we spoke about the possibility of the Labour Day weekend being a potential bottom when we look back at it. So far, this seems to be a possibility. As of September 21, the December contract is trading at $3.40 with a low from September 1 of $3.15. This is not implying that the September 1 low is set in stone, but rather that it could very well be a bottom but we will need to take another look at the chart in October when harvest is in full swing. Meanwhile, the patterns are telling us that we are in a consolidation range of $3.15 - $3.40 and if we could manage to break above the $3.40 on a close, we have an upside target of $3.60. Of course, the harvest pressure could insist on re-testing that $3.15 - $3.25 support level, but we will need to see some updated numbers from the United States Department of Agriculture (USDA) first.
Short term support is seen at $3.15 - $3.25 on the December contract, while overhead resistance is seen at the $3.40 - $3.60 level on the lead month. The short term indicators are positive for now, but the main trend is still down.
Soybeans, like corn, are forming an interesting support zone. The short term indicators are positive, while the longer term signals suggest a close below the $9.25 level could carry us back into the $8.50 range. As we mentioned a few weeks ago, it seems soybeans are quite content trading either side of the $10 mark. Good support is seen at the $9.25 - $9.50 level and initial resistance is at the $10.50 level. This confines the trading range to about $1 until we get something to disturb this balance. Soybeans are already started harvest and the October report could alter the yields and quality and provide us some clues to future price direction. We continue to see support at $9.25 - $9.50, while resistance is at $10.50 based on the lead contract. The main trend is still down.
With the September wheat contract going off the board last week, we now have a buy signal on the December wheat. This was initiated by the 20 cent differential in the September/December spread. As a technical trader, however, this is possibly setting up an opportunity for a move back into that gap between $3.85 and $3.93 based on the December chart. If we manage to trade back into that space, and hold, we may indeed have a red buy signal. Meanwhile there are a series of overhead resistance points about every 20 cents higher, starting at $4.20 on the December chart. Short term indicators are turning positive, but the main trend is still down.
HARVEST 2016 CROP CASH PRICES as of CLOSE on September 21, 2016
SWW @ $170.51MT ($4.64/bu), HRW @ $168.10/MT ($4.57/bu),
HRS @ $198.80/MT ($5.19/bu), SRW @ $172.93/MT ($4.71/bu).