Daily Grains Analysis – Corn and Soybeans Tumble as Risk Aversion Perpetuates

Grain prices continued to drop in early North American trade on Monday as risk of perpetuated throughout the market. Equity prices are tumbling, and the dollar is gaining traction weighing on grain prices. Hedge funds continue to reverse short positions in futures and options, which was likely the catalyst for the rise.

Corn Prices

Hedge fund traders exited short positions in futures and options and added to long position according to the latest commitment of trader’s report. According to the CFTC, managed money reduced short position in futures and options by 57K contracts while increasing long position in futures and options by 31K contracts.

Corn prices are dropping as risk off weighs on the commodity space. Corn is testing the first level of support which is seen near the 10-day moving average at 3.58. A break of this level would lead to a test of the January 2018 lows at 3.45 per bushel. Resistance is seen near the February highs at 3.62. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints in the black but the trajectory of the MACD histogram has turned negative which reflects consolidation.

Soybean Prices

Soybean prices continued to drop on Monday as risk aversion accelerated. Prices are poised to test target support near the November9.59.  Resistance for soybeans is seen near the 10-day moving average at 987 per bushel. 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). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices for soybeans.

Wheat Prices

Wheat prices continued to drop on Monday, dropping as risk aversion continued. Traders’ reduced both long and short position in futures and options according to the latest commitment of trader’s report released for the date ending January 30, 2018.  According to the CFTC, managed money reduced long position in futures and options by 5.6K contracts which reducing short position in futures and options by 19K contracts. Support on wheat futures prices is seen near the former breakout level at 4.30 per bushes. Resistance is seen near former support near the 10-day m442. Momentum is poised to turn negative but remains neutral. The MACD histogram is printing in the black with a declining trajectory which points to consolidation.

Daily Grains Prices – Corn and Soybeans Continue to Pull Back

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

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

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 Prices

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.

Daily Grains Analysis – Wheat Takes a Respite Despite Drought Conditions

Grain prices finally pulled back on Wednesday, after running led by Wheat on the heal of dry conditions for winter wheat. A sharp decline in winter wheat conditions in the Great Plains, where farmers are struggling through a drought, prompted a rally Hard Red Winter wheat, which led grains higher.  The dollar continued to trade under pressure on Wednesday which should continue to boost grain prices.

Corn Prices

Corn prices took a respite from its recent climb on Wednesday early in the North American trading session. 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 3.555. Resistance is seen near the August highs at 3.76. Momentum has turned positive as the MACD (moving average convergence divergence) index recently 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 have been weighed down by softer than expected export sales of bean oil. Export sales of soybean oil were in line with expectations last week, but declined by 58%, and were 47% below the 1-month average.  Expectations were for a decline of 42% compared to last year’s export sales commitments. The decline in bean oil demand has pushed the oil share to the lowest levels since August of 2016, making a fresh 18-month low.

Soybean prices are lower on Wednesday in early morning trade. Support is seen near the 10-day moving average at 987 per bushel.  Resistance for soybeans is seen near a downward sloping trend line that comes in near 10.05 per bushel. Momentum is positive but slowing as the MACD histogram is printing in the black with a flattening trajectory which points to consolidation.

Wheat Prices

Wheat prices have slipped on Wednesday trading lower after closing higher for 5-consecutive trading session. Dry weather throughout the plains should continue to buoy prices. Support on wheat futures prices is seen near the 10-day moving average at 4.36 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.

 

Daily Grains Analysis – Wheat and Corn Surge, Soybeans Trail

Grain prices are continuing to move higher as the short-squeeze continues, led by wheat prices. The dollar lost ground on Tuesday, paving the way for higher commodity prices. The most recent commitment of trader’s report shows that short covering is accelerating, as hedge funds are short the entire grain complex.  Hot and dry weather is expected to cover most of Argentina over the next 2-week period which could reduce production and add to the concerns over supply.

Corn Prices

Despite a decline in short position report by the commitment of trader’s report released for the date ending January 23, 2018, the open interest in short positions in corn in the managed money space is more than double the long positions. With more than 427K short futures and options, there is a lot of room to run before hedge funds cover their positions.

Corn prices continue breaking out, moving away from trend line resistance that now supports near 3.55 per bushel. Support is seen near the 10-day moving average at 3.53. Resistance is seen near the August highs at 3.76. 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.

Soybean Prices

Soybean prices are trailing and while they are rallying, bean prices are grinding higher. Hedge funds reduced the short position in futures and options according to the latest commitment of trader’s report.  Despite the 18K reduction in short positions, the open interest is more than the double long position which means there is a lot of room for prices to climb before managed money covers their short positions.

Soybean prices are slightly higher Tuesday. Support is seen near the 10-day moving average at 984 per bushel.  Resistance for soybeans is seen near a downward sloping trend line that comes in near 10.05 per bushel. 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.

Wheat Prices

Wheat prices are surging higher up more than 1.4% early in North American trade. Open positions that are short futures and options are nearly 3-times the number of long position in futures and options for those that are categorized as managed money.

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. Support is seen near the 10-day moving average at 4.33. 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.

Grains Rally on Worries About Drought, USDA Acreage Report

Futures for wheat jumped by the exchange limit on the Chicago Board of Trade, and corn and soybeans also rallied. Prices climbed amid concerns that drought in parts of growing regions of the United States may damage crops. The acreage report from the US Department of Agriculture also affected the prices.

The USDA reported that area planted by wheat in 2017 was at 45.7 million acres, down 9% from 2016 but still below forecasts. Area planted by soybeans was at record 89.5 million acres, up 7% from the previous year, but it was also below analysts’ estimates. Area planted by corn was at 90.9 million acres, down 3% from the previous year, but in this case the actual figure was above the reading predicted by experts. While specialists had expected that soybeans would overtake corn as the number one US crop in terms of acreage, it looks like US farmers actually preferred to plant corn at the expense of wheat and soybeans.

Contract for delivery of wheat in September jumped as much as 6.05% to $5.26 per bushel as of 00:25 GMT on CBoT today. Corn rallied 3.11% to $3.81 per bushel. November soybean futures gained 3.24% to $9.5475 per bushel.

This post was originally published by EarnForex