Grains Break Higher Following Reduction in Trade War Rhetoric

Treasury Secretary Mnuchin said that China would import more goods and reduce tariffs, to reduce the trade deficit with the United States.  All three major grains are higher on the session.

Corn Prices

Corn prices broke out again pushing above the $4 per bushel level and poised to test higher levels. Target resistance near the June 2016 highs at 4.39.  Support is seen near the 10-day moving average at 3.97.  Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Soybean Prices

Soybean prices gapped higher and are up 1.75% in early North American trade. Resistance is seen near the 50-day moving average at 1029. Negative momentum is decelerating as the MACD (moving average convergence divergence) histogram prints in the red with a flattening trajectory which points to consolidation.

According to the latest NOPA crush data, the April crush easily surpassed analyst estimates and became the largest monthly crush for any preceding April on record.  161.016 million bushels were crushed vs analyst estimates of 160.97 million. Crushing activity was down 6.31% from March but up 15.73% compared to April of 2017. Meal exports totaled 946,291 tons, up 7.71% month over month and 58.92% more than April of last year, as strong meal demand and good margins continue to drive the crush.

Wheat Prices

Wheat prices surged higher in early North American trade recapturing resistance, which is now supported near the 10-day moving average at 5.03. Resistance is seen near a downward sloping trend line that comes in near 540. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).