The last full trading week prior to Thanksgiving has wrapped up and the volatility of the week didn’t disappoint.

Soybeans saw the most movement with a trading range on the January contract of 51.25 cents and a settlement 19 cents higher on the week.

Wheat, like soybeans, traded with plenty of volatility and made new contract highs in three of five sessions for December SRW, while December HRW saw one day this week with a new contract high. However, SRW and HRW were only up 6 and 1.75 cents respectively for the weekly change.

Corn trade was more muted with a 16-cent trading range on the soon-to-expire December contract, which settled 6.5 cents lower than last Friday’s close. Corn was the weak link this week and was unable to accomplish the technical breakout soybeans managed.

Jim McCormick did a great job last week breaking down the November WASDE report and potential changes to look for in the months ahead, so I though it appropriate to look at the market from a technical perspective.

The most important takeaway for the week is what soybeans have accomplished so far, and what a strong close to the month will mean for technicians. January soybeans forged the contract high in June, and up until this week, have been in a well-defined downward trend. That all changed this week with futures breaking through the long-term downtrend and the next major objective is the convergence of the 100- and 200-day moving averages just under $13:

But, potentially more important than that, there is a setup for a major monthly reversal in soybean values. Prior to the November WASDE report release, January soybean futures priced in the expectation for a bearish report and were trading below the lows scored during the month of October on a front-month basis of $11.845. By the end of the week, January soybeans closed above October’s highest price front-month price of $12.625. Finishing the month above $12.625 will solidify the monthly reversal which is generally a signal of a strong bottom.

Wheat is a winner

Wheat has increased in value since the November WASDE report in two of the three varieties, SRW and HRW, while Spring Wheat has lost some of its premium to the other varieties due to a reported increase in stocks on the November WASDE report. SRW is the most-traded wheat contract and was propelled through $8 after the USDA reduced stocks for both SRW and HRW. Since making a strong low on the October WASDE report wheat has traded in an upward trending channel, making another strong low on the November WASDE report, and will now find support at $8 which was previously resistance:

Corn just sat there

Compared to soybeans and wheat, corn did not accomplish much this week. There were neither new contract highs, nor were and long-term resistance levels breached. But looking ahead, we must acknowledge that corn is at a decisive level that requires close attention.

Corn has both a long-term and short-term downtrend that has capped waves of buying this week; however, the short-term up trend from the October low scored after the October WASDE report is still intact. Should corn make a new high for the month, above the $5.86 high made on Nov. 2, it will also breach both aforementioned downtrend lines which will likely lead to strong technical buying similar to the buying soybeans enjoyed earlier this week. However, a break below this week’s low will breach the short-term up trend which will likely lead to weakness.

Be mindful that the long-term uptrend support is fifty cents below. How corn moves out of this area is likely dependent on whether the commodities can maintain its general inflationary environment.

Option strategies for both downside protection and ownership positions are driven by this type of technical analysis. While it will not predict the future, we can use it to ascertain the price levels that are significant and act accordingly. As always, feel free to contact me directly at 815-665-0463 or anyone on the AgMarket.Net team at 844-4AGMRKT. We are here to help.

Reach Brian Splitt at 847-946-2080 or [email protected].

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