Grains Surge Following Surprise Planting Report

 

USDA surprised the market on Thursday when it released its Prospective Plantings report and projected soybean and corn planting intentions below market expectations. Analysts had expected soybean planting intentions of a record 91.1 million acres and corn intentions at 89.4 million, but USDA reported soybean planting intentions of 88.982 million acres and corn intentions of 88.026 million. Despite the lower-than-expected intentions, soybean acreage is still expected to exceed corn acreage for the first time since 1983 and the second largest planted area in history. However, corn acreage would fall to its lowest level in the last three years and the second lowest level in the last 12 years.

Corn Prices

Corn prices surged higher climbing 3.8% in the wake of the USDA’s crop planting report. Resistance is seen near a downward sloping trend line that comes in near 390. Support is seen near the 10-day moving average at 377. Momentum has turned and is now positive as the MACD (moving average convergence divergence) histogram is moving higher and poised to cross the zero-index level. The fast stochastics surged higher reflecting accelerating positive momentum.

Soybean Prices

Soybean prices surged following the planting report that showed less than expected acreage. Prices were forming a wedge pattern which has now broken out. Support is seen near former resistance near a downward sloping trend line at 1037. Resistance is seen near the March highs at 1071. Momentum has reversed and is now poised to move higher.  The fast stochastics surged reflecting accelerating positive momentum.

Wheat Prices

Wheat prices moved higher but the planting report was not kind to this grain. Prices were able to recapture resistance which was former support near an upward sloping trend line near 450. Negative momentum is decelerating as the MACD histogram is printing in the red with a flat trajectory which points to consolidation. Prices are oversold as the fast stochastic is printing a reading of 5, well below the oversold trigger level of 15 which could foreshadow a correction.