There have been some new signals in Grains after quite a long period of sideways activity. The outlook has been mixed for some time and reports of continued shifts in consumption patterns in Asia meant the possibility that a bubble might be forming. Recent developments make that unlikely.
Wheat has held up better than the others in some recent weakness and is now flirting with support:
Corn has already broken down through some daily-scale compressions that formed last week and now looks as though it will fall further:
Soya looks even worse – the decline in the forward months since the top in September has been just as steep as the ascent. This is typical of a bursting bubble, not one that will inflate further.
The worst sign is that soya oil (persistently the weakest of this whole group) has now broken down from a monthly-scale compression:
There will be rallies, no doubt, and the resistance levels shown on these charts will provide good levels against which to sell – both to exit any longs and to get short for what looks like a phase of continued liquidation.