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Tech Guy Weekend Grain & Crude Comments 6/18/22

A follow up on Stock Market Comments from a few days ago: After the gap down last Sunday night I mentioned a downside measuring gap target of 3631 on the ESU futures. On Friday the ES traded down to 3639 (only 8 handles above) with a spike down/up on heavy volume.


Therefore, the odds of the low being in or very near, is high. If the buyers really show up in the broader (all indices) stock market next week, the down pressure in all commodities will be relieved.


After trapping shorts on Thursday, the July and Sep Wheat faked out the buyers on Friday and sold off to 1044.75.- below the 1060 support in order to flush out longs. Markets play games to oust traders from the market. The 1040-1060 area is good long term support in Sep Wheat and a buy and hold is still favored.


What wheat did was blow out the bottom trendline of the triangle - this created a different pattern for buying below 1051.50.


November Soybeans held above the triangle breakout of 1534 and closed at 1536.50 on Friday - July Beans held above the 1700 support. Both July and Dec Corn closed within about 5 cents of their support. I expect this support to hold because technically both these markets are in a well established uptrend.


The volume for both Corn and Bean contracts was not spectacular (very heavy) on the highs - this tells me it is not a trend changer. A seasonal high in the grains should have much more stopping volume (volume which turns a market the other way). Friday appeared to be some longs taking off risk because of the long weekend.


Even grain technicians and traders know that weather is the main driver of price this time of year - this can make tech analysis more difficult - not an excuse, simply reality.


I would think it takes a very different forecast for next week for the wheels to fall off - a high stakes, energetic time of year in the grains. Energy stored up from the last 2-3.5 months is being used for movement.


It looks like 100 degree temps all the way to the Canadian border along the MN/ND border for Sunday's high. I like to include the NOAA graphical 10 day outlook in my weather arsenal. You move your mouse over each day to see temperature and rain gradients.


https://graphical.weather.gov/sectors/conusWeek.php#tabs


August Crude Oil update: Crude took out weak longs on Friday by blowing out the 109 support and trading to 106.40. Based on the spike in volume and price together down there tells me this is a solid low for a rally back to at least the 115 area if not 117 Tues/Wed.