Grain prices continued to pull back in early North American trade on Thursday. The recent dry weather over the Great Plains, which led prices higher, has been somewhat muted. Trader’s are now more concerned with precipitation that is expected to pass through the grain belt of Argentina. The dollar continued to trade under pressure on Thursday which is buoyed grain prices.
Corn prices are now consolidated and forming a bull flag pattern which is a pause that eventually refreshes higher. Corn is hovering near the 50% Fibonacci retracement level that comes from the drop from the highs last July near 3.93, to the lows seen in September near 3.28, which comes in near 3.61. Prices could retrace back to their breakout level which is a downward sloping trend line which was former resistance that is now support near 3.55 per bushel. The first level of support is seen near the 10-day moving average at 3.56. Resistance is seen near the August highs at 3.76. Momentum remains positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.
Soybean prices are lower on Thursday in early morning trade. Prices continue to lag corn and wheat and has slide down to support is seen near the 10-day moving average at 989 per bushel. Resistance for soybeans is seen near a downward sloping trend line that comes in near 10.10 per bushel. Positive momentum has decelerated as the MACD (moving average convergence divergence) index prints in the black with a declining trajectory which points to consolidation. The RSI (relative strength index) moved lower with price action reflecting accelerating negative momentum.
Wheat export sales for the 2017/18 marketing year totaled 427,200 metric tons, up 179% from last week and 105% more than the prior 4-week average. New crop sales totaled 26.5, lifting total sales to 453.7 TMT. Combined sales were up 138% from last week and exceeded analyst expectations that ranged from 175 to 400 TMT. Export commitments are 76% of the USDA forecast with 19 weeks to go and need to average 338 TMT weekly to meet projections. Export sales are 10% less than last year’s commitments during the same time frame.
Wheat prices continued to decline on Wednesday, trading lower after closing higher for 5 out of the last 6-trading session. Support on wheat futures prices is seen near the 10-day moving average at 4.38 per bushel. Wheat prices are poised to test the August highs at 4.62. A break of this level could lead to a test of the July highs at 5.55. Momentum has turned positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.