grains

Daily Grains Analysis for March 14, 2018 – Corn Attempts to Break Out

Grain prices were mixed on Tuesday with corn lead the grain complex higher attempting to break out. Hedge fund significantly added to their long position in futures and options according to the most recent commitment of trader’s report released for the date ending March 6, 2018. According to the CFTC, managed money added 64K contracts to long position in futures and options while reducing short position in futures and options by 40K contracts. The 104K contract change in corn positions has placed the open interest in corn futures and options at 349K long versus 186K short in the managed money category.

Corn Prices

Corn prices surged and broke out but were unable to hold on to elevated levels 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. Resistance is seen near the July highs at 394. 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 75.14 and could foreshadow a correction.

 

Soybean Prices

Hedge funds continued to add to long position in futures and options according to the latest commitment of trader’s report released for the date ending March 6, 2018.  According to the CFTC, managed money added 33K contracts to long position in futures and options taking the open interest up to 195K, 17.7-times the short position open interest in futures and options in the managed money category. This leaves the market open for a long liquidation.

Soybeans rebounded and closed up on the day on Tuesday and continue to remain buoyed. 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 and closed at session lows which is an ominous sign. Support is seen near the former breakout level at 469. Resistance is seen near the 10-day moving average 4.94. 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).