March Wheat - 1 to 2 Lower
March Corn - Steady to 1 Lower
March Beans - Steady to 1 Higher
I had not looked at the weekly wheat chart in weeks, but when I did I received a pleasant surprise. First I'm going to remind you how the weekly charts are constructed then I will tell you what the surprise is.
Weekly charts are made up of every front month (wheat in this case) until the contract expires - Dec 14th this month. Then on Dec 15th, the March contract of wheat is the player on the weekly chart.
During the week of Dec 5th - 9th, December Wheat was weaker than March and nearly sold off to 700 while March Wheat only traded down to 723. The surprise is that I spotted a definitive formation on the weekly wheat chart which is not present on any other wheat chart of any timeframe.
The setup began on Sunday, Dec 4th or the next day. This is where December Wheat gapped down about 6 cents from Friday's close and sold off to 700 during that week.
Then the next week was when the Dec contract expired and March became the player on the weekly wheat chart. It traded up to 767 during the week of Dec 12th-16th and closed the gap (at 737) from the last week. This means that this gap is an exhaustion gap on the weekly wheat chart. Literally, the downtrend exhausted itself.
The definition of exhaustion gap is roughly stated that the sellers have capitulated and the buyers have taken control indicating that the low after the gap is the low - 95-99% probability that there will be no more lower low and that a sturdy uptrend begins. Here is a blowup of the weekly wheat showing the exhaustion gap - you can see the gap with your naked eye (without a magnifying glass). This puts the "mixed signals" from yesterday's comments to bed.
From Yesterday's corn comments: "I expect an up day tomorrow." March Corn rallied 4.75 cents to close near 652, above the downtrend line resistance. Also, it closed within 3 cents of last Thursday's high at the 655 level.
The first leg up from the 635 level was 25 cents, therefore the next leg's minimum price target is 670, 645+25=670. 645 is the low of the current leg. Check out the updated March Corn chart.
From Yesterday's Soybean comments: "I expect the 1458 area to hold support tomorrow, and price should rally from there". 1463 was the price that held support today, and beans managed to rally about 15 cents for a close around the 1479 level.
1497 is the next resistance and this is the next most likely action - up to 1497. You will be able to see it on the chart. Also notice all the trendlines and where they intersect price.
Support at 443 held nicely today in the continuous soymeal chart. In fact, price stayed about 3 bucks above this breakout point - 446. The setup is still very bullish.
February Crude Oil just marked time today as price remained virtually unchanged at 76.02. We are sticking with the plan - holding longs for 81-82.