From yesterday's comments:
"Soybeans traded sideways today, remaining above support at 1340."
Today, the July Soybeans actually tested the neckline at 1340 (low was 1340.25) where the fund buyers awaited to kick price back up into the 1350 to 1362 range.
You already know this, but repetition is the key to learning. Beans are having to rotate sideways in this range to gain enough energy for another leg higher. The first leg higher that began last week in beans was 84 cents long.
I have written some possible next targets up on the bean chart using Fibonacci ratios. What we know with almost certainty, is that the 3rd wave higher in an up impulse is almost always an extension on the first leg or longer than the first wave.
Therefore, using this information I have calculated possible next targets using 1.38, 1.50, and 1.62 X 84 (1st leg). July Beans are currently in the 2 wave which is corrective and we are looking for a minimum 1-2-3-4-5 higher.
Here is today's 4 hour July Bean chart so you can visualize what we are talking about.
The first impulse higher in July Corn was 59 cents long. Corn has also been correcting/consolidating the last couple of days. This 2 leg/wave has marked an ascending triangle which we knew about after corn tested the 606 high last Thursday.
I have calculated the same Fibonacci numbers here in corn. The first estimate is 59 X 1.38 = 81. Then you add 81 onto the low of wave 2, which is at 580. 580 + 81 = 661. I did this same calculation with 1.5X and 1.62X to get the possible targets higher.
Both July corn and soybeans look as though they are almost ready to rally some more, starting wave 3 up, but we never know exactly when. This is where the testing of patience kicks in. Check out the 8 hour July Corn chart.
July Wheat gave us a clue today that it probably will not need to correct all the way down to 602, as we mentioned yesterday. The reason for this is that wheat traded higher today and closed above that high to the left at about 625.
Today's low at 621.25 is first support and 608 is lower support. We are still looking higher towards the 670 level, for the next target higher. However, the high today at 648 could be the end of the first impulse higher, because you can count 5 legs higher already.
Leading diagonals actually compress instead of expand as they go higher. Sometimes, the first leg in an up impulse is a diagonal, because the bullish energy is not robust enough.
If this is the case, July Wheat could correct back down to 600. Confusing, I know. Just not as confident about the wheat market. Take a look at today's 4 hour July Wheat chart and see what you think.