Longer-term agriculture futures chart analysis with Jim Wyckoff

Market watchers who trade/hedge in futures need to pay close attention to the longer-term weekly and monthly continuation charts for nearby futures. History shows that strong-trending markets tend to their prices gravitate toward historical highs or lows that are depicted on the weekly and monthly charts. Longer-term charts also tend to weed out the sometimes distracting “market noise” that can be seen on the shorter-term daily charts.




Corn:The weekly corn futures chart shows a strong bull market is in play. The next upside target for the bulls is the 2015 and 2016 highs that were notched just below the $4.40 area. See at the bottom of the chart the Moving Average Convergence Divergence (MACD) indicator. Note the MACD’s posture is nearing the postures of the indicator that were seen in 2015 and 2019. Such is an early clue that this latest rally could be nearing its peak sooner rather than later. Once the blue line of the MACD starts to turn down on the weekly chart that would be a solid clue the corn market has topped out.




Soybeans: The soybean futures market has seen a strong upside price move that began in late April. The next upside price target for the powerful bulls is pushing prices to the 2016 high of $12.08 1/2, basis nearby futures. While the steep price uptrend is presently firmly in place on the weekly chart, do note that the Relative Strength Index (RSI) has moved into overbought territory (above 70.0). The last time the RSI was so high, on the weekly chart, was the summer of 2016, when the soybean market put in a major top.



Soybean Meal: The meal futures market has screamed higher in recent weeks, after playing some catch-up to the rally in soybeans. Like soybeans, meal futures are well into overbought territory as seen by the RSI on the weekly chart. The RSI recently moved to near the 2016 peak of the indicator and has rolled over—suggesting a market top is closer at hand, just like occurred in 2016.




Soybean Oil: Remember that longer-term charts show strong-trending price moves gravitating toward historical highs and lows. It certainly appears nearby soybean oil futures are gravitating toward the 2016 high of 38.11 cents, which is stiff longer-term technical resistance that could stop the rally.



SRW Wheat: Soft red winter wheat futures prices are in a longer-term uptrend as seen on the weekly continuation chart for nearby futures, and just a few weeks ago hit a multi-year high. The bulls are strong and the pullback from the high seen in October is so far just a downside correction in the prevailing uptrend. However, see that the MACD indicator has seen its blue line start to rollover from its uptrend, which is an early warning signal the wheat market bulls are exhausted. Note that the previous times on the chart when the blue MACD line started to roll over at such elevated levels were near the price peaks in 2017, 2018 and 2019.



HRW Wheat: The weekly hard red winter wheat futures chart is also in a steep price uptrend, but the RSI indicator has moved above 70.00 (overbought) and turned down, which is what happened when the market topped out 2017 and 2018.




Cotton: The cotton futures market bulls remain in firm technical control as prices are creeping right up an uptrend line seen on the weekly chart. The bulls’ next upside price objective is to fill a downside price gap created on the weekly chart in May of 2019. A drop in prices below strong chart support at the 66.50-cent area would put the bull market run in jeopardy.