Fis technical - Grains 13-3-17 - Freight Investor Services · Upside moves from here should meet technical selling pressure as shorts look to increase their positions . Resistance-

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Technical Report Global Leader Dry Bulk Derivatives

Grains And Ferts

Highlights:

• SOY – Bullish divergence on the daily

chart and oversold momentum on the

weekly suggest support levels should

hold around these levels.

• Corn – resistance levels rejected, bearish

engulfing candle points to a weakening

technical. Caution on a close above US$

359 ½ on the daily chart as this could

have bullish implications going forward.

• Wheat – A weakening technical is now

on support, upside moves should be met

with selling resistance.

• NOLA – Closed at US$ 218, the

momentum pullback would suggest

buyers should be cautious on upward

moves.

• UAN – Range bound, one to avoid at this

point from a technical perspective

Technical Analyst

Edward Hutton

44 20 7090 1120

[email protected]

Client Relations

Andrew Cullen

44 20 7090 1120

[email protected]

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Soy March 2017 Weekly

Support – 992, 972, 938

Resistance – 1014, 1,031, 1,057

Last weeks close was below the 50 period MA, and this

could be significant going forward as it has been a key

support since April 2016.

Technically we are below key averages, but continue to

hold above the support at US$ 992 ¾ which represents

the base of the M formation mentioned last week. Until

broken we remain in a higher high higher low formation

and the market should be considered as being in bullish

(rather than neutral to bearish) territory.

Oversold momentum in the form of the stochastic would

suggest that the weekly chart is not yet ready to break

out to the downside and should find support at these

levels.

We continue to see a weakening technical, however

until we see a downside breakout this market is not yet

confirmed as bearish.

Source Bloomberg

Soy March 2017 Daily

Support – 992, 981, 965

Resistance- 1.008, 1,017, 1,025

Lower highs and lower lows indicate a weakening trend and

we are now testing key support levels around the US$ 992

¾.

We highlighted last week that the high on the 28/2 would

suggest that we could be witnessing a corrective phase

rather than a bear play. This continues to be the case.

Momentum at 10 is now looking oversold and showing a

bullish divergence. Being on a support level with the

divergence would suggest that support should hold in the

near term.

The daily technical appears more bullish than the weekly at

this point. Oversold momentum in the weekly and daily

would suggest support levels should hold in the near term

and look to test the weekly pivot resistance at US$ 1,008.



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Corn March 2017 Weekly

Support – 349, 342, 325

Resistance – 363, 370, 384

The resistance zone has held in the weekly corn futures,

with last week’s candle producing a bearish engulfing

which would suggest lower pricing in the longer term from

these levels.,

A reduction in open interest would indicate that longs

have been exiting the market for a few weeks now, and

this supports the bearish candle pattern. This is also

confirmed by continued lower momentum, with the

stochastic at 41, having crossed below the bullish support

line at 50.

The technical picture is weakening on the weekly chart

having made a series of higher lows and higher highs, we

remain in bullish territory in terms of recent price action

above US$ 355 ¾ on the weekly chart. A close below this

level on the weekly chart means price action will go from

bullish to neutral in the near term play. However the

overall trend has a bearish bias as it remains below key

longer term averages.

Source Bloomberg

Corn March 2017 Daily

Support – 9,030, 8,935., 8,650, 8,100 Resistance- 360,363,370

Support- 355, 352, 349

Last week’s assessment that the upward move was not

being supported by volume suggesting that longs were

looking to exit the market. This has proved to be correct

and has resulted in a downward move.

Lower highs and lower lows would imply that the bullish

technical is either over, or in a corrective phase. Market

shorts need to be cautious on a close above US$ 359 ½ as

this would suggest that we are in a corrective phase

rather than at the begging of a bear reversal. Oversold

momentum should be a cause for caution at these levels.

The technical is weakening, oversold momentum does

not mean the market is a buy, it is just a warning of

potential basing in price. US$ 359 ½ is the key resistance,

above here shorts should be looking to tighten risk.



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Wheat March Weekly

Resistance – 435, 444, 447

Support- 418, 411, 392

The Daily technical failed to test the 200 period MA, it

did however fail at the 200 period MA low average,

highlighting the weakness in the market.

Daily momentum (stochastic) is starting to look

oversold at 28, as we approach the US$ 418 support

level. If we hold here we could see a short term swing

to the upside as swing traders look to take advantage

of the oversold conditions. Technical resistance can be

found between US$ 435 and US$ 447.

A close below US$ 418 would be considered as

technically bearish going forward.

Rejection of the resistance on the weekly chart and

lower highs on the daily chart point to a weakening

technical in the long term. Upside moves from here

should meet technical selling pressure as shorts look to

increase their positions.

Resistance- 441, 447, 464

Support- 412, 410, 388

We noted last week that upside price rejection was

leading us into a weaker technical and that longs should

tighten risk. This has been the case.

An increase in open interest on the downward moves

would suggest that the market is positioning itself from

the sell side supporting the rejection of the upside

resistance levels. We are also seeing momentum crossing

from bull to bear and it is now below the 50 line.

Technical support can be found at US$ 412, a close below

this level would have bearish implication going forward.

Resistance can be found between US$ 441 and US$

464. Market longs would need to see a close above the

last resistance before looking to enter on anything less

than a swing basis at this point.

Wheat March Daily



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US Gulf Nola Urea Granular Spot Price Weekly

Resistance – 232, 234, 265

Support- 218, 213, 206

The Nola Urea index is now in balance, in a sense it is

at fair value. The 218 close last week puts it on our

main support level.

Momentum is oversold at these levels, and this could

be a sign of a further upward push. However the

momentum pullback is greater than the recent price

pullback, suggesting that any upward moves from here

could/should stall at the technical resistance levels

mentioned, as fresh sellers look to take advantage of

any upward swing.

Technically oversold and on support, the stochastic

would suggest that any upward moves from here could

be creating a bull trap. Longs should stick to a swing

basis only until they see a strengthening technical.

UAN Q2

Resistance – 187.25

Support- 182

Little to say on the UAN Q2 contract other than it

remains in range,

We are now the range support and momentum is

bearish on the daily chart. However we need to see

a close below US$ 182.50 (preferably US$ 182) to

confirm a downside breakout. We remain neutral on

this until a directional breakout.

Technical buy level at US$ 187.25 and sell level

below US$ 182.



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Technical Analysis Glossary

Pivot Point

A point where the market makes a new high or low, before reversing in direction.

Trend Line

A directional line connecting pivot points.

Primary Trend

The main trend line over an extended period of time.

Secondary Trend

Distinct from but within the primary trend. Indicates recent trend.

Support

A previous market low where market participants have been prepared to enter long positions.

Resistance

A previous market high where market participants have been prepared enter short positions.

Range

An area between the support and resistance.

Relative Strength Index (RSI)

A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine

overbought and oversold conditions in an asset. The RSI ranges from 0 to 100.Typically speaking, an asset is deemed to be

overbought once the RSI approaches the 70 level, and likewise, as the RSI approaches 30, it is deemed to be oversold.

Fibonacci Retracement

Refers to areas of support or resistance. A Fibonacci retracement shows the potential retracement of a financial asset

relative to the original move in price. A trend line is drawn between two points and then the vertical distance is divided by

key Fibonacci ratios; 23.60%, 38.25%, 50.00%, 61.80% and 100.00%. This tool can also be used as a projection method.

Moving Average Convergence Divergence (MACD)

A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is

calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the

MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals on the

crossover of the two lines. The histogram highlights the narrowing and widening of the two averages acting as an indicator

for slowing or increasing momentum in the market. I.E a flattening or decreasing histogram in an upward market would

suggest that the upward move could soon stall.



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Award winning broker

In 2015 FIS was named as the best performing inter-dealing broker in Iron Ore swaps and options by Singapore-based SGX

AsiaClear for the third consecutive year.

For More information on this report please contact:

Edward Hutton

Tel: +44(0)20 7090 1121

E-mail [email protected]



i






Technical Analysis Glossary

Pivot Point

A point where the market makes a new high or low, before reversing in direction.

Trend Line

A directional line connecting pivot points.

Primary Trend

The main trend line over an extended period of time.

Secondary Trend

Distinct from but within the primary trend. Indicates recent trend.

Support

A previous market low where market participants have been prepared to enter long positions.

Resistance

A previous market high where market participants have been prepared enter short positions.

Range

An area between the support and resistance.

Relative Strength Index (RSI)



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A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine

overbought and oversold conditions in an asset. The RSI ranges from 0 to 100.Typically speaking, an asset is deemed to be

overbought once the RSI approaches the 70 level, and likewise, as the RSI approaches 30, it is deemed to be oversold.

Fibonacci Retracement

Refers to areas of support or resistance. A Fibonacci retracement shows the potential retracement of a financial asset

relative to the original move in price. A trend line is drawn between two points and then the vertical distance is divided by

key Fibonacci ratios; 23.60%, 38.25%, 50.00%, 61.80% and 100.00%. This tool can also be used as a projection method.

Moving Average Convergence Divergence (MACD)

A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is

calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the

MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals on the

crossover of the two lines. The histogram highlights the narrowing and widening of the two averages acting as an indicator

for slowing or increasing momentum in the market. I.E a flattening or decreasing histogram in an upward market would

suggest that the upward move could soon stall.

Award winning broker

In 2015 FIS was named as the best performing inter-dealing broker in Iron Ore swaps and options by Singapore-based SGX

AsiaClear for the third consecutive year.

For More information on this report please contact:

Edward Hutton

Tel: +44(0)20 7090 1121

E-mail [email protected]

Documents

Fis technical - Grains 13-3-17 - Freight Investor Services · Upside moves from here should meet technical selling pressure as shorts look to increase their positions . Resistance-