The Barchart National Corn Price Index (NCPI, weighted national average cash price) looks to be in Wave B (second wave) of its major (long-term) 3-wave downtrend. Based on the market’s bullish fundamentals, both national average basis (short-term) and futures spreads (long-term) the upside target area for the NCPI remains between $7.20 and $7.40 with an outside chance of reaching $7.70. The NCPI finished October near $6.8250.
December Corn: The 2022 contract remains in Wave B (second wave) of its major downtrend after closing October at $6.9150, up 14.0 cents for the month. This put aside a possible Benjamin Franklin Fish Similarity (like fish and guests, markets start to stink after three months of moving against the trend) as the contract posted its fourth consecutive higher monthly close. Given the market’s bullish futures spreads, Dec22 could extend this move to near $7.20, if not closer to its May high of $7.6625. I’m not expecting the contract to hit a new long-term high. Once the Dec22 issue goes off the board this chart will reflect the Dec23 contract. Dec23 closed October at $6.2575 with an eventual downside target near $5.40. This could make Dec23 an attractive sell long-term. Key prices for Dec23 are its previous 4-week high of $6.3725 and low of $6.0675.
The Barchart National Soybean Price Index (NSPI, intrinsic value of the market) moved into Wave B (second wave) of its major downtrend as it posted a bullish spike reversal during October. Given the market’s fundamentals are bullish, both basis (short-term) and futures spreads (long-term) the upside target area is between $15.17 and $15.68. If a Benjamin Franklin Fish Similarity plays out (see the discussion of December corn) we would expect the NSPI to close higher both November and December. A key factor that could drive the market higher would be increased export demand and late fall/early winter weather problems in Brazil.
November Soybeans: The November 2022 contract remains in a major downtrend, though could consolidate between its September high of $15.0875 and October low of $13.50 heading toward last trading day on November 14. Once this happens, the chart rolls to the Nov23 issue priced at the end of October at $13.7350. The downside target area is between $12.90 and $11.99, with the July spike low of $12.8850 likely to provide support.