Friday, May 16, 2008
Stock indexes have been moving steadily higher in recent weeks on a bull run by climbing the proverbial "wall of worry". However, the daily chart on the left here shows that stock prices haven't risen that much over the past two weeks, and the Bollinger Bands are suggesting a trading range and resistance at the 200 day moving average. Today, shown by the intra-day chart on the right, stocks are showing some selling volume.
Soybeans have now formed a top, at least temporarily. Anything can happen now. Prices could sell off through more profit-taking, or we could see still another round of buying. The daily chart at the far left shows that soybean prices started a bounce from their lows about a week ago off the Lower Bollinger Band, but prices are now at the Upper Bollinger Band resistance point at a price of about $14 per bushel.
"Anything can happen." -- Mark Douglas
Is this the commodities bull round II?
Meanwhile, corn and wheat are flat to modestly higher, but trading volume appears light.
Thursday, May 15, 2008
Corn and soybean prices have collapsed after sideways trading. On the daily chart (far left for soybeans), both corn and soybeans are in a consolidation pattern, and both have reversed in recent days at the Upper Bollinger Band. Corn penetrated the Upper Bollinger Band just a few days ago, and has been in a reversal pattern ever since.
Oftentimes, we will see sell-offs on Fridays as traders liquidate their positions before the weekend. We will then see traders place new trades following the Monday afternoon USDA crop reports, which give us clues to the progress (right now) of seed planting and the impact of weather for the previous week.
Corn -- Trading Sideways
Soybeans -- Early Selling, Sideways Trading
Wheat -- Modestly Higher Today
Wheat Daily -- Are We Forming a Bottom?
Note the heavy buying in the volume indicator.
Wednesday, May 14, 2008
Prices for soybeans today ended almost flat. The chart (above) looked like radio static, without any strong momentum either higher or lower. This is very poor follow-through on yesterday's strong soybean rally, and must certainly disappoint traders, farmers who would sell, and commercials alike.
Corn and wheat both sold off, with the long-term downtrend in wheat still intact, as mentioned on my previous post today. I barely eked out a profit in trading, and that was mostly from a small trade in 10-year treasuries and a better one selling corn. I should have sold wheat, but I let that one get away.
Often, with all the talk of high commodity prices, the news media tends to ignore that many commodities prices are moving lower. Many of the soft commodities have been flat to lower over the past few months, including sugar, coffee, cocoa, and cotton. Both industrial and precious metals are also well off their highs from earlier this year. This chart for wheat is another example. The price of wheat has fallen 40% in the past two months -- more than $5.00 per bushel! The left chart is the daily chart, and the two in the middle and the right side show today's activity on intra-day charts. That daily chart for wheat has shown prices falling for more than two months!
USDA reported yesterday afternoon that crop planting for corn and soybeans are only at about 1/3 to 1/2 of normal for this time of year. This falls terribly short of what we would normally expect for mid-May. It also begins to suggest that crop yields this year have the potential for also falling short of expectations. This is long-term bullish for prices.
Tuesday, May 13, 2008
While corn was down for the day, it also lead a late-session rally that erased most of its losses for the day.