US grains are showing long position liquidation and short selling following initially favourable crop development. This is creating short-term oversold conditions. Wheat has seen the biggest correction, partly due to less concern over Europe’s important Ukraine crop. Last Friday’s upward key day reversal saw no follow through confirmation but may have marked a penultimate low. The next upward dynamic between current levels and the January-February low would suggest at least a short to medium-term floor.
Corn shows a similar condition. Oats should be losing downward momentum between current levels and the October low at $3. Rough Rice has seen a significant downward break but is also short-term oversold.
In stock markets, short-term overbought conditions dominate, as you can see from these few examples: Germany, also near the psychological 10,000 barrier, Italy, Norway, Sweden and the USA. However, these are all occurring within reasonably consistent upward trends so breaks of the May reaction lows would be necessary to signal more than temporary reactions and consolidations.Back to top