March CBOT corn futures retreated Tuesday amid speculation that the U.S. Department of Agriculture will raise its production estimate for the 2013-2014 crop that was harvested in the fall, in a report due out this Friday.
Technically, March corn tested and turned down from 20-day moving average resistance on Tuesday. The action etched a bearish shooting star on the daily candlestick charts, which gives the bears the edge going forward.
The longer term trend remains solidly bearish for March corn. But since mid-November, the medium-term trend has turned neutral, with a trading range developing between support at $4.18 1/2 to 4.17 and resistance at $4.40 3/4.
The bears did hit a new contract low at $4.17 on Jan. 3, but then reversed higher. It would take a strong and sustained move under $4.17 to confirm a downside breakout and open the door to a fresh selling wave. If the contract low at $4.17 falls, the bears will target a test of $4.10 1/2, the Dec. 6 weekly low on the continuation chart and then the $4.00 level.
$6.70 -- the contract high $4.26 1/2 - -the 10-day moving average $4.28 3/4 - the 20-day moving average $4.30 1/4 -- the 40-day moving average $4.18 1/2 -- the contract low MARCH CBOT WHEAT, combined pit and electronic trading
March CBOT wheat closed lower Tuesday as the recent corrective rally move has failed to take hold. Freezing weather could hurt small pockets of winter wheat in parts of the Midwest, but in general, most areas have enough snow to avoid winterkill during the current bout of below-zero temperatures.
Technically, the trend is down. Resistance lies at $6.12 3/4. The bulls would need to scale that ceiling to improve the short-term outlook. On the downside, the bears are eyeing a retest of the $5.95 contract low. If $5.95 falls, the bears will press for a quick test of $5.91 1/4, the May 2012 weekly low.
$9.12 1/4 --the contract high $6.04 3/4 -- the 10-day moving average $6.15 3/4 -- the 20-day moving average $6.37 -- the 40-day moving average $5.95 -- the contract low MARCH KC WHEAT, combined pit and electronic trading
March Kansas wheat closed with a marginal gain Tuesday, but mostly treaded water within recent ranges. The primary trend remains down, but the contract remains in a minor correction phase. Major support remains at the contract low hit last week at $6.30 1/4. Monday's high at $6.50 3/4 is resistance.
