From last Thursday's comments regarding Dec Wheat: "The next upside target is 894. Not looking at the lower levels of support anymore (808, 791) - 818 should hold - this chart keeps marking higher highs and lows."
On Friday Dec Wheat started another up leg, coming close to matching Wednesday's high of 873.5 on the close.
What was most interesting to me was that Dec Wheat gapped up (1 tick) on the pit (8:30CDT) open. This is either a breakaway gap at 841.25 or will serve as support if more selling is necessary. Upside targets for next week are 894, 926 and 943.
Please observe the Dec Wheat chart below - notice the small gap Friday and how price responded to all the support/resistance lines over the last 2 weeks. Take your time if you have it.
The Sep Corn 22 - Dec Corn 22 bull spread last traded up to +12.5 yesterday after trading around +5.5-6.0 on Wednesday. Also, the Dec22/July 23 spread is in an up trend and traded to an inverse Friday (+1.75). Near term demand is ticking up. This is not bearish. Also, Dec Corn marked the highest daily close (685) on Friday for the move - since June 22nd, closing above the resistance (June 1st low) at 682.
The Dec Corn chart is in a steady uptrend, consistently marking higher highs and lows - momentum is up, so it would take a bigger force to stop the up movement. Support comes in at 659. Resistance is the gap at 733 then 749 above that.
We have no control over what the USDA prints on Monday morning. All we can do is stick to what the charts are saying and keep in mind what the previous findings and observations have been - the crop progress reports - less than ideal growing conditions, and what other outfits have said about what they think yields are, etc. It is very difficult to quantify fundamentals.
We know there is some damage to corn and maybe soybeans, but how much? - the risk is to the upside, meaning shorts are more at risk (from what the Dec Wheat and Corn charts tell us, Beans neutral) - we just don't know how much at risk at this point. Here is the 6 hour updated Dec Corn chart:
The Nov Bean chart is more neutral. The gap below (1348) is still slightly at risk of being filled (bearish surprise) - and would serve as support on a selloff. However, it was somewhat bullish that the market rallied from the Aug 18th low (1376.50) on Thursday and Friday.
Resistance is at 1457 and then 1536.50 with the latter being an overhead gap to the left side of the chart. The one fact we know for sure is that Nov Beans have been accumulating energy since the July 22nd low - moving up and down 6 times until now - this is a good amount of energy. Here is the updated Nov Bean chart:
Crude Oil Update: from Thursday's comments regarding Crude - "we need to see a daily close above 86 to confirm that the 81.5-81.2 low is a solid daily and weekly low." - a good sign for the bulls - oil traded and settled above 86 on Friday at 86.79.
The only other observation I have going into next week - considering Roger's comments about the stock market being very oversold and the USD being down Friday and virtually all commodities and equities buying up on Friday - this could be a "risk on" environment starting for all assets. We will know for sure after a few more days of trade. If it turns out to be true, this will be supportive energy for the grains - with the wind being at our back.
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