This is a sample entry from Tom Dosdall’s newsletter, Technical Ag Knowledge, published on Tuesday, Septermber 6th, 2016.
Corn bulls find hope in seeing that managed money is net short 174,489 futures contracts as of last week’s CFTC Commitment of Traders report. Our technical levels show that short term rallies could still be somewhat limited, however, barring any surprising supply side developments or new export news. The immediate supply zone at 328’4 was rejected in Monday overnight trading and will serve as initial resistance to start the week. A close above this level would be a sign of strength and could help to target a rally back toward the 50 day SMA at 346’0. Demand should potentially come in strong near 317’4.
Beans look more vulnerable here, in my opinion, following last week’s “death cross” on the charts (50 day SMA crosses 100 day). You can see the last time this cross occurred was the opposite “golden cross” back in late March/early April. Beans then proceeded to rally +250’0 before topping out. Keep in mind, unlike corn the funds are still net long +93,264 futures contracts and subject to additional long liquidation. In other words, if you are an under-priced producer at these levels, I would suggest proceeding with caution. Short term rallies appear to face a fair amount of headwind now in the 970’0 area.
Dec wheat has carved out a new base of support at 391’0 and appears extremely oversold according to TAS Navigator. Still, we do not have a bullish trigger on the chart until we see a close above 401’2.
When trading below 0.6578 the cotton market is out of balance/bearish, but it is prone to stalling out in the congestion area between 0.6450-0.6600. Short term rallies toward 0.6900-0.7000 are viewed as selling opportunities, in my opinion.
The 10 month bear trend could be broken to the downside which would be viewed as a bearish technical development and send the market looking for new support. Old support could become new resistance near 103.500. Producers are encouraged to keep hedges in place or roll down to this new level.
I continue to have hogs on my “mildly bullish” watch list. The trend line in blue intersects with the old TAS supply level near 60.600 so I am using this level as key short term support. A close below here would put the market into a more “neutral” balance with the next meaningful support level at 58.000. The 50 day moving average was hit almost exactly on Thursday last week,, so this is my bull target (63.900).
The Fed driven rally appears to be over for now but the market remains technically out of balance and favoring the bulls. Support of the uptrend is viewed at 95.201 and 94.814.
Market is currently trading out of balance/bearish with resistance at 45.60. Momentum is in the process of crossing over bearish. Short term bear target 42.00. Secondary objective 40.45.
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