March Wheat - 3 to 4 Higher
March Corn - Steady to 1 Higher
Jan Beans - 5 to 7 Lower
January Soybean meal was a drag today, on the soy complex. It was down 3.60 closing at 408.10. This in turn, caused Jan Soybeans to pause a little bit after the breakout up yesterday - beans were still able to eek out a small gain for the day - up 1.75 closing 1459. I expect the breakout point, about 1448 to hold support.
Unlike Jan Beans, Jan Meal is still confined by a triangle that is closing in fast - a series of very small range days which are building up energy to be released. An upside breakout in meal is the most likely scenario. When this occurs, Jan Beans will benefit from this boost.
Below is the daily continuation Soymeal chart showing the magnificent triangle. Remember the continuation chart is always the front month - currently January.
This triangle has converged from a difference low to high from 120 points to about 23. Please study how the trendlines affect price from left to right.
March Wheat was able to hold it's own today, after the spike low yesterday on the 15 minute chart. Also today, Wheat made a higher low from yesterday. This is a good argument for the selling and low of the move being in place.
If I was trading March Wheat I'd get long at the market with a sell stop 4 cents below the August 18th low of 760.25 - This puts the stop at 756.25. This is a risk of about 27 cents with a reward of 77 cents. The reward ratio is a 2.85 times the risk level - most traders would say this is a good ratio even if your wins & losses are only 50%/50%.
I'm saying the most likely scenario is that yesterdays low holds within 5 cents of that low. Even if March Wheat needs to come test the 760 level, there's a good chance of not getting stopped out! You will see the trendlines and triangle on the chart below - the upper downsloping line is the profit target.
There is no change in corn technicals - now rolled to March contract.
I had a question about open interest in Crude Oil overall. It was reported that the open interest is now at the lowest level in 7 years - since 2015. Open interest is the total number of open contracts in all the contract months added together. Bottom line is that crude traders are very disinterested! Thank you for the question.
This current down trend in Jan Crude Oil began November 7th when the open interest was 1.446 mil. The OI now is 1.405 mil. It has decreased about 45,000 contracts during this period. Generally speaking when OI goes down in a downtrend, this confirms the down move is only a correction - longs getting out and some weaker money going short or selling. The very low current open interest means there is more relative potential room for longs to enter the crude market compared to average open interest.
Since Crude has had a good test below the Sep 26th low and reversed back above on a closing basis indicates bullish, low risk buying opportunity. This is what I have been talking about since the big washout/capitulation day a week ago from yesterday (Monday). Please take a look at the 4 hour crude continuation - currently January with the upper targets and bumps (correction areas) labeled.
