This is a sample entry from Tom Dosdall’s newsletter, Technical Ag Knowledge, published on Monday August 15, 2016.
**Commitment of Traders (futures only as of Aug 9) CORN -141,495(-34,727 since Aug 2); SOYBEANS +99,425 (+2,404) SRW WHEAT -120,312 (+10,159)**
Corn may have carved out a significant low following Friday’s bearish USDA report/reversal into the close to finish higher on the day. A close today above 336’2 will confirm a more mildly bullish technical picture for the week ahead on the charts. We have a well defined area of supply/resistance at 348’4. Funds are holding a large net short futures position (-141,495 as of Aug 9) so a short covering technical bounce cannot be ruled out.
Similar to corn, beans show impressive technical price action following Friday’s bearish report. Has the market now priced in peak estimated supply? We continue to view the 950’0 area as a strong base of support and entry area for re-ownership strategies. When trading below 999’0, the market is in a neutral/fair value trading zone. A close above 999’0 tilts the scales more bullish and in favor of a possible run toward the 100 day SMA at 1028’6.
Net short fund position (futures) is reduced by over 10K in Friday’s report, confirming the spec trade may have been as short as it was going to get a week or so back. Technical price action is strong on Monday morning on the back of bean and corn strength. The key today is watching for a close above 424’4 to signal a more meaningful shift in trend in favor of bulls. Should this occur, and given the size of the remaining net short fund position, I would not rule out the possibility for a rally to target 447’0 (1). The charts show a strong base of support at 402’0.
Cotton is out of balance/bearish when trading below 0.7294. Initial demand level this week comes in at the 0.7000. I expect the weak USD could help to support in this area. When trading above 0.7294, trend looks more friendly for the bulls and a possible rally toward the top of the value zone at 0.7672.
Cattle looks to potentially struggle again with the 10 month bear trend line resistance near 115.850. Producer looking for an area to hedge production might consider hedges in this area. Lower trend line support is all the way down at 104.000. A close below 112.900 sets up the bearish picture once again.
The hog market could finally be getting ready for a recovery bounce after trading 15 cents higher just two months ago. TAS Boxes put in a good base of demand at the 58.00 level. Navigator indicates bear trend exhaustion and a potential shift in favor of more buy interest. A close above 60.600 confirms technical shift in trend to bullish. Short term target would be 64.250.
The Dollar has a mildly bearish setup to start the week but we see a demand level nearby at 95.121 which should help to support the market (TAS demand intersects with 50 day simple moving average). Short term rallies toward 96.400 are viewed as selling opportunities.
The strong up trend in crude oil helps to support commodities last couple of weeks. Producers will want to take note of the convergence of moving averages nearby at 46.40 for a potential reversal area. The uptrend is supported near 43.33.
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