This is a sample entry from Tom Dosdall’s newsletter, Technical Ag Knowledge, published on Monday July 25, 2016.
**Commitment of Traders (futures only as of July 19) CORN -29,758; SOYBEANS +113,276; SRW WHEAT -121,448**
As long as Dec Corn stays below 3.52 the trend is down, however Friday’s strong rally off the lows and higher close is positive for short term outlook. TAS Navigator is communicating potential bear trend exhaustion so new short positions are cautioned. A close above 3.52 will get the market back into neutral balance with likely congestion all the way up to 3.70.
Soybeans fell strongly out of bed after breaking below the TAS demand level we’ve been talking about at 10.35 and could have a little more down before finding the next well defined support. The market is now trading below both the 50 and 100 day moving average which is bearish for short term trend. Look for initial support #1 at 9.60 and stronger support #2 at 9.20. Momentum studies are down so rallies toward 10.18 and 10.35 are viewed as potential selling opportunities.
A fresh record net short managed money position in Friday’s CoT report could help to spook some bears to the sidelines as the trade is getting very crowded to the downside. The market is now back within its “fair value” zone between 4.20-4.52. With the big net short position we remain cautiously bullish wheat, however expect it could struggle to close above 4.52 this week. Should that occur, it will be viewed as technically bullish for longer term trend and could shake a larger number of shorts out. New support for this week is 4.20.
TAS Navigator did a great job warning the cotton bulls of trend exhaustion last week. We start off Monday in the center of the newly defined value zone with fading bullish momentum. I’ll be watching 0.6973 as a key level for support of the uptrend. Rallies toward 0.7500 are viewed as selling opportunities.
Friday’s Cattle on Feed Report is viewed as bullish with placements below expectations and below the low end of the expected range. On-feed number for July 1 was below expectations, so look for a higher open on Monday. The longer term trend line in blue should help to support the October contract this week near 105.000. Rallies toward the upper trend line would intersect with the 50 and 100 day moving averages which could be strong resistance. For producers looking to market or hedge, this would be my target.
Friday’s close was the first “green” day in 13 sessions as the market finally found some support at the November lows. Historically speaking, the market has fallen far below its moving averages which is a sign of oversold conditions. I am looking for a bounce in the week ahead, but with the longer term trend still down.
The 50 day moving average crossed the 100 day last week, confirming the bull trend we’ve been talking about the last few weeks. The market has carved out a new, steep up-trend with 96.800 support and 98.000-98.400 as a short term upside target. Things start to get a bit congested above those levels.
The one month bear trend support line suggests crude oil could find some support soon and bounce 2.00-3.00 where it would be viewed again as a selling opportunity, in my opinion. Longer term, the market looks it will eventually want to test April lows near 38.70. Momentum studies are bearish with no signs of exhaustion yet.
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