Technical Update - Mixed technical picture in Soft commodities Technical Update - Mixed technical picture in Soft commodities Technical Update - Mixed technical picture in Soft commodities

Technical Update - Mixed technical picture in Soft commodities

Commodities 4 minutes to read
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  Wheat strong support at 725 is key
Soybeans short-term uptrend is challenged and could reverse
Corn indecisive below 200 daily SMA
Coffee selling pressure easing and is bouncing. Was that the bottom for now?
Cotton range bound in tighter and tighter range. Break out imminent.

Today's Saxo Market Call podcast.
Market Quick Take from the Saxo Strategy Team 

Wheat: 725 seems to be a strong support for Wheat. Several times Wheat has bounced from 725 but has failed to gain upside momentum and Wheat seems stuck between 725 and 800.
Break out of that range is needed. If Wheat closes below 725 a swift sell-off down to around 677 and the weekly 200 SMA could be seen. 
If Wheat can close above its short-term falling trendline there is resistance at 800. A close above 800 could lead to a rally to 855 possibly 900.
Underlying sentiment is negative however, with negative RSI and all Moving Averages declining.

Source all charts and data: Saxo Group

Soybeans seem to be trading in a rising channel and is testing the lower rising trendline. A break of the trendline could lead to Soybean selling down to 1,450-1,425 . Strong support at around 1,417. Minor support at 1,465 should be observed.
If Soybeans manage to bounce from the lower trendline the uptrend is likely to continue.
However, divergence on RSI indicates Soybeans to trade lower.

Corn is very indecisive. Very short-term Corn seems to be trading in a rising channel but is struggling to break above 200 daily SMA. Strong overhead resistance at around 700. If Corn breaks below 648 lower support at 634 is likely to be taken out too for a move down to the 0.618 retracement at around 617 possibly lower.
All Moving Averages are declining and with RSI showing divergence indicating likely lower Corn prices.
For Corn to gain upside momentum a close above 700 is needed

Coffee has bounced back above 200 weekly SMA and support at around 147 after being hit with heavy selling. There is RSI divergence on weekly chart indicating the downtrend is exhausting and the bounce could continue higher. A bounce to test resistance at around 174 could be seen. It will however, require a close above the 55 daily SMA which could be a bit of a struggle.
Daily RSI is also showing negative sentiment with no divergence and needs to close above 60 to reverse that.
Bottom line; Coffee is in a down trend that seems to weakening and could have exhausted but it has not yet been confirmed.

Cotton is forming a symmetrical triangle like pattern and needs to breakout for direction.
A bullish breakout followed by a close above 89.65 is likely to push Cotton to the 0.618 retracement at around 104 where the 200 daily SMA is likely to provide resistance.
a bearish breakout and a close below 80.35 Cotton is likely to test October lows around 70.

RSI divergence explained: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
Notification on Non-Independent Investment Research (
Full disclaimer (
Full disclaimer (

Saxo Bank (Schweiz) AG
The Circle 38

Contact Saxo

Select region


All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law.

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.