Technical Analyst, Saxo Bank
Summary: After declining for the past 12 months Grains have rebounded and seem to building uptrends. Uptrends that can take Grains higher in coming weeks and months
The rise in Grains could be due to the weather conditions across US and Europe, as outlined here by our Commodities Analyst, Ole Hansen.
Below the three major Grains; Wheat, Soybeans and Corn from a Technical perspective
Wheat has broken bullish out of its months long falling channel after bouncing from support at around 574 (weekly chart)
On the daily chart Wheat is now back above the Cloud, above the 55 and 100 Moving Averages and RSI is positive. All indications of higher Wheat prices short-term and medium-term.
Facing some resistance at the 200 weekly Moving Average, a minor correction could be seen but there is upside potential to strong resistance at around 799. 0.618 retracement of the December 2022 to present downtrend is at 803.45. A likely correction.
Declining 55 weekly Moving Average will provide some resistance however, the resistance at around 725 could prove to be a bit of struggle to overcome.
However, the area around 800 is the strongest resistance.
If Wheat drops back below its upper rising trendline in the the falling channel the rebound/uptrend is likely to be demolished.
Soybeans have bounced strongly after spiking down to touch its 200 weekly Moving Average. Now testing the resistnace at around 1,468. A correction should be expected from here possibly down to 1,425-1,405 support. But the short-term trend is supported by positive RSI. A break of the 1,468 resistance is likely.
Medium-term the upper falling trendline can provide some resistance but if Soybeans closes above the trendline it will also ´have closed above 21, 55 and 100 Moving Averages. That would be a strong signal of higher Soybeans prices.
If Soybeans slides back to close below 1,400 the rebound/uptrend picture is demolished.
Corn bounced from support at around 552 forming a Bullish Engulfing bottom and reversal candle. Corn is likely to test upper falling trendline shortly. (see weekly chart)
A weekly close above 686 will confirm medium-term uptrend.
Short-term Corn formed an Inverted Shoulder-Head-shoulder like pattern with a potential short-term target at around 675. (Indicated by the vertical arrows)
A close below the right shoulder i.e., below 577 will result in the down trend to resume. First indication of that scenario to play out would be a close below 600
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