Technicals | Jun 07 2012
Corn
As mentioned corn has traded back to levels not seen since Dec 2010, the price action over the last couple of sessions has been supportive. Technically, we need to see a break above US 580 in order to become bullish. This level is important as it suggests a false break to the downside and one to be monitored closely. Momentum indicators on the trade would be positive once this break has been released.
Wheat
It has been a volatile couple of weeks for the wheat complex. After seeing a 12% drop we are coming close to a double bottom. Our decision to close the long was correct and at these levels we will monitor the prices action for a chance to get back in. News that Argentinian Farmers have decided to go on strike over higher taxes will help provide some support to the market. In addition, to this we are hearing that the Russian production and exports are worst than predicted which may see some tightness in supply. Technically, we have good support at US 615 and then at US595. We feel it needs to do an awful lot of work in order to get through these levels and as such have adopted a bullish bias.
Soybean
Our temptation to go long last should have been taken up, as we would have had good profits. The market has bounced of support at US 1325, which we will claim as solid support. On any bullish strategy we are comfortable that just below this area can now be used as a place for stops on long positions. In addition to technical support coming to play we have noted that the Brazilian government has trimmed back its estimates on carry over stocks for the year. This should be supportive, as the production has already been decimated by drought. In trading soybean at the moment suggest you can wait for the market to come to you and if long stops need to be placed at US 1315.
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