Wheat Leads Grains Higher Soybeans Continue to Lag

Corn and wheat prices continued to breakout on Thursday while soybean prices rallied but lagged.  Concerns over tariffs in China are weighing on soybean prices. Exporter have been able to find a home for U.S. soybeans even though China has canceled recent orders.

Corn Prices

Corn prices closed higher on Thursday surging to nearly 4-dollar per bushel, and are steady on Friday in early north-American trade. Target resistance on corn is now seen near the July 2017 highs at 4.39.  Support is seen near the 10-day moving average at 3.90.  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). The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Soybean Prices

Soybean prices closed higher on Thursday but are down nearly 1.5% in early North-American trade. Support is seen near May lows at 1030.  Resistance is seen near the 10-day moving average at 1032. Momentum is neutral as the MACD histogram prints near the zero-index level with a flat trajectory which reflects consolidation.

Soybean export sales for the 2017/18 marketing year came in at 416.3 TMT, up 12% from last week but 59% less than the prior 4-week average.  Sales for the 2018/19 crop year totaled 469.9 TMT, lifting combined sales to 886.2 TMT.  Combined sales were up 65% week over week and within analyst estimates that ranged from 300-1,100 TMT. 2017/18 export commitments are 97% of the USDA forecast with 18 weeks to go and need to average 79 TMT weekly to meet projections. Current sales are 3% behind last year’s pace. Major purchases were reported for Vietnam, Taiwan, and Mexico.

Wheat Prices

Wheat prices Surged higher on Thursday and opened slightly lower on Friday. Support is seen near the 10-day moving average at 5.04. Resistance is seen near the July 2017 highs at 553. 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). Prices are overbought as the RSI (relative strength index) is printing a reading of 70.33, above the overbought trigger level of 70 and could foreshadow a correction.