Daily Grains Analysis for March 9, 2018 – Corn Rallies Soybeans Slide

Grain prices were on Friday in North American trade, following a mixed WASDA report from the U.S. Department of Agriculture. The report was bullish for corn prices which settled on the highs of the session on Thursday, and somewhat bearish for soybeans which settled closer to the lows of the session on Thursday.

Corn Prices

Corn prices surged higher closing at the highs of the session on Thursday and opened nearly unchanged on Friday.  After forming a bull flag pattern prices broke out and are now poised to test target resistance near the July highs at 3.94 per bushel. Support is seen near the 10-day moving average at 3.776 per bushel. Positive momentum has reaccelerated as MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher corn prices.  The RSI surged higher and is now way above the overbought trigger level at 78 and could foreshadow a correction.

Soybean Prices

The USDA’s March WASDE report showed that the USDA raised its 2017/18 US soybean ending stocks projection 25 million bushels to 555 million, which, if realized, would represent 13.3% of its total usage forecast of 4.16 billion bushels. This is somewhat bearish and weighed on soybean prices. USDA’s ending stocks forecast was 25 million bushels above market expectations, which ranged from 490 million bushels to 580 million bushels and averaged 530 million. The increase was the result of a 10-million-bushel increase in USDA’s crush forecast, which was more than offset by a 35-million-bushel decrease in its export projection. The changes increased USDA’s 2017/18 US soybean crush projection to 1.96 billion bushels and reduced its export forecast to 2.07 billion.

Soybeans rebounded off support but closed lower following the bearish WASDA report. Support on soybeans is seen near and upward sloping trend line that comes in near 1047. Resistance is seen near the 10-day moving average at 1052. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The RSI (relative strength index) is moving lower and printing a reading of 64, moving out of the overbought zone, and into the neutral level which is generally considered a sell signal.

Wheat Prices

Wheat prices are hovering near the weekly lows. Short-term support is seen near the 10-day moving average 4.89. Resistance is seen near the July highs at 5.53. Momentum is turning neutral as the MACD (moving average convergence divergence) histogram prints in the black with a downward sloping trajectory which points to consolidate. The RSI (relative strength index) is moving sideways which reflects consolidation as it prints a reading of 64.5 at the upper end of the neutral range.