March Wheat - Steady to 1 Lower
March Corn - 1 Lower
March Beans - 1 to 2 Lower
This is a difficult week for market participants in the grains because the biggest report of the year is Thursday and it appears these markets are not going to tip there hand pre-report. The most probable scenario is a lot of back and forth movement without much conviction.
The feeling is kind of helpless - do we put on a hedge, a trade, sell some physical product before the report or wait for the production report to give us some direction? A rock and a hard place comes to mind.
For Corn and Beans I think the risk is to the upside - We have a close idea what the USDA will say about final US production - this is already baked into the markets. However, the numbers I am awaiting are the South American crops. WASDE will say something about this.
The most current SA numbers are the inflated trendline yield estimates from multiple years of modeling. All I know is the Argentinian and southern Brazil crops are not getting bigger. The odds heavily favor them cutting the numbers somewhat. Is any reduction already baked into the market? I do not know for sure, but the probability is that no significant amount is already factored.
Therefore, March Corn and Beans continue to trade in the same range which began last week. The momentum is still up on the daily and weekly charts, so my targets higher over the next few weeks still pertain - 730 in March Corn and at least 1583 for March Soybeans.
Remember the inverted head & shoulders working in March Corn - here is the updated intraday view of it. Inverted head & shoulders which have a higher right neckline are generally more bullish than if it were lower.
March Soybeans are still in an up trend and it marked a higher low last week after filling the old June gap to the left - an important objective. Since November 17th, beans uptrend has accelerated - you will see this fact on the 2 hour bar chart below with 2 blue up trendlines and labelings.
March Soybean Meal had a small set back today after marking a new contract high on Friday.
The March Wheat contract is giving both the bears and bulls fits with its 5 to 7 point ups and downs since last week. This is a broadening pattern, specifically engineered to cause traders and hedgers to give up and exit the market due to whiplash. The bulls are worried wheat will see lower prices and the bears keep getting stopped out and have very heavy net short position.
The bears are more at risk in this range because if momentum can increase when March wheat trades back to 757-758, it's a straight shot back to 800. This market has not been able to test 736 again since this low was marked last Thursday - the bulls have a foothold.
Here is a 30 min March Wheat displaying this broadening formation which has stopped shorts out at least 2 times since the 736 low, by marking 2 higher highs.
February Crude Oil had a net gain today of 1.07 as it is working higher from the right shoulder of it's inverted head & shoulders on the 4 hour chart. This is the highest close in the last 4 trading days. Check out the updated crude chart.