🖐🏻Five Charts In Five Minutes #8

High level technical analysis of the most popular grain and oilseed futures contracts.

At least once a week we go over light technical analysis of grain and oilseed futures contracts. Subscribe to our newsletter, join our Telegram channel, or watch for our Twitter updates for latest posts. Feel free to manage your subscriber preferences at the bottom of this e-mail to fine tune which topics you wish to be subscribed to.

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Corn Futures 🌽

Corn futures continue to trade with bullish overtones supported by the overall grain futures complex. With production problems well known in Argentina, the trade continues to look for a new narrative to price futures. From our perspective, the narrative might end up being export demand which has recently turned the corner with two back to back weeks of strong export sales. Time will tell, but the Corn chart appears friendly to the bulls. 

🟢Current upside targets:  7.02, and 7.05

🔴Current downside targets: 6.78, 6.73, and 6.61

Wheat Futures 🌾

Wheat has finally shown some interest at the bottom end of the range. All it took was +4 months of continuously lower prices to crush any remaining bulls who were left standing. From a technical point of view, the long running bear market trend since the high of 2022 has finally traded through. This event has opened the door to more localized trends to test. Keep in mind that funds across the board are now net short all wheat contracts on all exchanges making the contract vulnerable to short covering rallies going forward.

🟢Current upside targets: 7.64 and 8.00

🔴Current downside targets:7.34 and 7.12

Soybean Futures🌱

Soybeans have become increasingly difficult to read from a technical point of view. For that reason, we will defer to acting only on the closest technical level of 15.48, which may open the door to the previous contract high of 15.72. Outside of that, pay attention to what is going on in Soybean Meal futures for general direction and the pulse of the market.

🟢Current upside targets: 15.48 and 15.72

🔴Current downside targets: 15.00 and 14.89

Soybean Oil Futures 🌱🛢️

Soybean oil continues to be a victim of fund position rotation after the EPA decision in December. Funds have reduced their net long position from 105 thousand contracts to 35 thousand contracts, finding more value in accumulating Soybean Meal futures, Corn, and Soybeans. Although fund liquidation continues, the technicals continue to perform very well in this market. We expect a range bound trade for the time being with an inflection point coming up in the next 10 days.

🟢Current upside targets: 62.36 and 64.00

🔴Current downside targets: 60.00 and 58.48

Soybean Meal Futures🌱🐮

Soybean meal continues to overwhelm any bearish interests in the market. Last week’s price action was a perfect demonstration of this bullishness as funds liquidated a chunk of bullish bets only for the contract to make new highs several sessions later (March 2023). We are now approaching the 2022 high of Soybean meal at ~495 and the psychological barrier of 500. At these levels and volatility, we will let the cash players determine how high this contract will go (and soybeans) as the technicals are no longer obvious. 

🟢Current upside targets: 494, 500, and 509

🔴Current downside targets: 466

TLDR

From a technical point of view there does not seem to be as many obvious trade setups to be had versus prior weeks. What is more concerning is that the leader of the pack (Soybean Meal) appears to be setting the entire tone of the market and is the only contract near its 2022 high. That’s something for every trader and hedger to pay attention to if we decide to turn this market upside down.