March Wheat - 1 Higher
March Corn - 1 Higher
March Beans - Steady to 1 Lower
The 2 main features today in the grains was heavy selling and record volume together. March Wheat, Corn & Beans all had more volume the first 30 minutes and hour than any other day except Jan 12th - report day - going back 2 months. In March Wheat however, this volume eclipsed even Jan 12th.
This peak volume occurred during the first 30 minutes and hour of the session. Further, this volume spike coincided with the deepest selling leg - this tells me it was capitulation, or forced selling because of margin calls. Is this the beginning of a larger down leg? This would be the other possible explanation of the heavy volume.
I don't think it is the start of a down leg. Instead, I believe it is the end of the small down correction in March Corn & Beans within a larger bull market. The strong money accomplished the goal of forcing weak money out of these markets so they could buy lower, get rid of some competition and begin another up leg.
In March Wheat, this record-like volume occurred while the 720.50 low was tested, taken out and closed above. This phenomenon also has the DNA of a capitulation selling spike low. You don't always know when a correction or selling leg is over, but when it is over, the market gives you big clues.
March Corn sold down to near the July 10th high of the March contract, which was the swing high after corn made it's 2022 low earlier in July. This July 10th high and another high which occurred January 10th were the support levels today. These levels are marked on the March Corn chart as "these lines". You will see them here.
Also notice on the above chart that corn closed within a few ticks of the big, upper triangle line.
Next up is a zoomed in, 30 minute March Corn chart so you can see the volume spike compared to the last 6 weeks.
Here is the corn continuation chart zooming out so you can see where the December contract July 10th high was relative to the rest of the chart. Today's low is also above the right shoulder low, thus forming a higher low which you always want to see in an uptrend.
March Soybeans found support exactly on the uptrend line from the 2020 lows on the continuation daily chart. I don't think this was a coincidence. Today's intersection is marked with a red arrow pointing upwards at today's bar and the 2020 line.
On the March contract Daily chart, price reversed up from the steeper uptrend line drawn. You will see it marked with a red arrow and a note. Also you will see a 1 cent chart gap from the low of Friday's bar.
I believe this an exhaustion gap, meaning no more selling. Exhaustion gaps normally form after a longer trend, but their is something more rare about this market - the bull spreading going on/high demand which the USDA has not accounted for yet? The March/November spread actually increased approximately 3 cents during this 4 day down correction. Demand, demand, demand.
March Wheat traded the biggest volume today (1st 30 minutes) relative to the last 6 weeks, therefore you will see a squenched up 30 minute chart - so you can see further to the left. Another feature of today's wheat session, is that March Wheat closed above the old contract low printed on January 10th of 720.5. These facts are supportive/bullish.
You will also notice a new horizontal red line drawn across the most recent low and target line around 765. This new lower target was created because wheat marked a lower low today. 765 should be a level where wheat will correct somewhat - maybe down to 750-748 before heading up to the 805 level.
March Crude Oil update: Oil tested last Wednesday's high today and closed above the weekly line for the 2nd day in a row, while closing above the neckline for the 4th day out of the last 5 days - should be on it's way to 90. Generally speaking, crude oil and the grains trade together (up or down), so perhaps oil's strength is a bullish indicator for the grains next leg up. Here is today's chart.
