Bearing the Pains of the Grains…

Posted on Posted in Commodities

Wheat, corn and soybeans have all been in extended bear markets. From a technical analysis perspective, they have suffered major damage and are in free-fall or downward spiral. Driving this negative performance in grain commodities are fundamental agricultural conditions which continue to deliver record after record crop productions, thus creating a supply-demand imbalance.

To further emphasize this, here is a look at their performance over the last three and twelve month periods.

  • Cash Wheat is down -23.98% over the last three months since April-16-2014 and has made new lows 24 times during the same period. It has fallen -20.73% and made 22 new lows over the last twelve months.
  • Cash Corn is down -23.12% over the last three months since April-16-2014 and has made new lows 27 times during the same period. Over the last 12 months it has declined -44.27% and made 39 new lows.
  • Cash Soybeans are down -17.7% over the last three months since April-16-2014 and have made new lows 19 times during the same period. Over the last 12 months, they have also declined -20.65% in price and made 25 new lows.

No one knows where the bottom will occur. However, when it comes, it will be supported by fundamental changes in production yields. Keep your eye on the supply (and the charts too). Until then, bear the pains of the grains or step aside and wait with patience.

 

weekly continuation chart of wheat futures july-16-2014
Click to enlarge

 

weekly continuaton chart of corn futures july-16-2014
Click to enlarge

 

weekly continuation chart of soybeans futures july-16-2014
Click to enlarge

 

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