Grains Move Higher Led by Corn and Wheat as Soybean Tariffs with China are Removed

Grain prices surged are higher in early North American trade following whipsaw price action on Tuesday where grains like corn hit fresh multi-month highs but closed lower into the settlement. Grains initially received a boost on news that the trade spat between the U.S. and China was on hold, but that positive sentiment faded, just to be re-ignited on Tuesday. With China like to remove tariffs on soybeans and begin to purchase beans from the U.S. again, any artificial price cap should be removed.

Corn Prices

Corn prices are 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 are up slightly and are testing resistance is seen near the 50-day moving average at 1029. Support is seen near the 10-day moving average at 1009. 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).

Cumulative soybean bushels crushed by NOPA members during the 2017/18 season are 1.280 billion. The USDA is expecting to grow the crush by 4.68% to a new record of 1.990 billion bushels. The 2016/17 crush totaled 1.901 billion bushels. Through April, NOPA crush members have crushed 5.68% more soybeans than last season. This is currently ahead of USDA projections.

Wheat Prices

Wheat prices are higher by 1.7% in early North American trade recapturing resistance, which is now support near the 10-day moving average at 5.02. 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).