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Tech Guy Opening Calls & Comments 6/26/23

July Wheat - Steady to 2 Lower

Dec Corn - 5 to 6 Higher

Nov Beans - Steady to 2 Higher

The main thing that's grabbed my attention today and Friday are the old crop/new crop soybean spreads. They have all gained handsomely, while the corn spreads have not been as impressive since June 16th.

The July/November soybean spread has gained about 82 cents since June 16th, while the August/November soybean spread has gained about 46 cents. When a spread increases in price it means they're buying the first month and selling the other ones. Here is the July/November bean spread chart.

The soybean board as a whole is becoming more inverted from July out to March 2024. The weekly soybean chart, which is still the July contract, is within 30 cents of the February highs - fast approaching.

With July and August soybeans leaving all the back contracts in the dust, this is telling us that near term demand is increasing in conjunction with new crop supply starting to become threatened in the field - sort of a double whammy.

Therefore, despite what the news may be saying that demand is flat or exports are lagging/slow, etc, the spreads tell the actual truth. I don't know for sure, but the feel from the charts and the spreads I'm getting is that over the next few days, soybeans will mark new highs while corn may trade sideways - take more time to make new highs.

Check out the weekly (July) soybean chart once again. Do you see that void of bars above 1550? Things could get interesting. 1550 to 1565 may provide some resistance, but I don't know for how long. It doesn't seem like the rally will end there based on what we know currently.

Here is the continuation (July) daily chart for perspective and reference.

I have learned and heard that the strongest bull markets in the ag sector are the ones that are inverted and becoming more inverted with time - accelerating.

As expected, the 580 area in December Corn provided healthy buying support from the funds on the evening open last night. During the pit session around mid session, Dec corn marked a higher low - this is constructive.

The July/December corn spread has gained about 11 cents since last Thursday, so there is some demand creeping into the corn market, just not to the degree in soybeans. The July corn chart almost painted a doji today, with a big spike down and up.

I call it a spinner bar/candle - the small body is nearly in the middle of the bar/candle. It's indicative of energy building and indecision. Check out the (July) continuation corn daily chart.

The NASS good/excellent crop ratings dropped 5 points in corn and 3 points in soybeans today. More drastic was Illinois down 10 in corn and 8 in soybeans. For Iowa, corn dropped 3 points and 8 in soybeans!

I found a crop conditions graphic on AgTalk. It compares every year going back to 2008 on the good/excellent ratings for the corn crop beginning on May 14th and moving throughout the growing season. This graph shows current conditions about 5 points lower than 2012 at this time.

The winter wheat crop is 33% harvested, according to NASS today. July Wheat corrected about 10 cents today to settle at 722.75. I don't have a good feel for whether wheat will need to correct to 695 or remain supported at the 720 level. I am continuing to count the Elliot waves here. See what you think looking at the 8 hour July Wheat chart.


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