Talkin’ Techincals in Grains
Talkin’ Technicals
There was a material change in the technical landscape of the grain markets this week, but what stands out the most? Between price defending key moving averages and confirmed divergences, the grain markets are getting exciting. Understanding the technical landscape will help in identifying opportunities on both sides of the market and across multiple time horizons.
December Corn: Head & Shoulders Bottom?
Last week, December corn managed to stage consecutive closes above the 20-day moving average for the first time since June 5th and 6th. However, the inability to settle above 412’6 laid the foundation for the contract to retest critical support at the 20-day moving average to begin this week.
On Thursday, bidders went on the offensive and were able to propel Dec corn off the 20 day moving average scoring a bullish engulfing candle in the process. They were able to compound that strength on Friday, pushing price above the 50-day moving average and making a clean break above previous resistance at 412’6. The technical gains made by Dec. corn over the last couple of weeks set up a potential head-and-shoulders bottom if corn can defend the 407’4-407’6 range in the coming days/weeks.
This week’s late gains will widen out trading ranges in the immediate term, offering traders a gamut of strategies to employ. Momentum is in the middle ground with RSI slightly below 60, but trending higher. The next immediate resistance area to watch for is the 38.2% retracement of the 2025 high-low range at 425’6. For longer-term bulls, the 407’4-407’6 support area becomes structural to withhold the potential head-and-shoulders bottom.
Key Support Areas:
- 412’6
- 407’4-407’6
- 401-398’6
Key Resistance Areas:
- 425’6-427
- 436’2
- 446’4-450
December Wheat: Catch-up Trade in the Offing?
December wheat has long been the laggard of the grain complex, but is showing signs of a potential catch-up trade. After defending the contract lows early this week, it was able to push higher and make a clean break through its 20-day moving average. As with corn, the 20 day moving average has been a significant resistance point for the December wheat contract.
The technical landscape has been showing hints that a bottom may be close, with confirmed divergence between each of the last two contract lows. Moreover, we had a bullish engulfing hammer on the most recent contract low. The volume profile is also something to be encouraged by. Volume has been consistently high for the past two weeks despite a relatively rangebound trade.
Anecdotally, last year’s December wheat contract bottomed on August 27th. No two years are ever the exact same, but this year’s price action is structurally similar to what we saw in 2024 when wheat was able to stage a 70-cent rally off its lows.
Key Support:
- 517’2-520
Key Resistance Areas:
- 550’6-551’4
- 573-577’4
- 590’4-593
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