Daily Grains Analysis for March 13, 2018 – Soybeans Rebound, Corn forms Bull Flag

Grain prices were slightly higher on Tuesday with soybeans and wheat leading the rebound after dropping on Monday. This follows Friday’s WASDE report which was somewhat bullish for corn prices and bearish for soybeans which settled closer to the lows of the session on Monday.  Trader’s will now be eyeing the inflation reports which are scheduled to be released in the U.S. on Tuesday.

Corn Prices

Corn prices were nearly unchanged on Tuesday and are forming a bull flag pattern which is a pause that refreshes higher. Support is seen near the 10-day moving average at 3.80 per bushel. Positive momentum is decelerating as MACD (moving average convergence divergence) histogram prints in the black with a declining trajectory which points to consolidation.  The RSI moved lower but is above the overbought trigger level at 72.14 and could foreshadow a correction.

Soybean Prices

The estimated soybean crush margin moved lower as soybean meal and oil price reductions outpaced lower soybean costs. Revenues fell 2.5% vs a 1% drop in costs. The value received from oil and meal per bushel of soybeans crushed fell 33 cents, moving from $12.90 to $12.57. The cost of soybeans decreased 10 cents to $10.36 per bushel, allowing the margin to narrow 23 cents to $2.44 per bushel. Despite the reduction, the margin is currently 73% more than the $1.28 seen at this time last year. Year over year, meal stocks are up 23% from what they were in December of 2016, and oil stocks are 5.5% higher. The USDA expects to grow the crush by 2.69% this year. five months into the current crush season, their projections appear to be on target. The crush is currently running 2.522% ahead of last season’s pace, and 0.17% below forecast.

Soybeans rebounded from session lows after gapping lower on the open on Tuesday. Prices closed higher on Monday after opening at a 14-day low. Support on soybeans is seen near the former breakout level at 1010. Resistance is seen near the 10-day moving average at 1050. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

Wheat Prices

Wheat prices opened higher on Tuesday by nearly 1%, after closing lower on Monday. Support is seen near the former breakout level at 469. Resistance is seen near the 10-day moving average 4.94. Momentum is turning neutral as the MACD (moving average convergence divergence) histogram prints near the zero-index level with a flat trajectory which points to consolidate. The RSI (relative strength index) is moving sideways which reflects consolidation as it prints a reading of 62 at the upper end of the neutral range.