Corn and Soybeans Break Down as Export Sales Dive

Grain prices are lower after corn and soybeans broke down on Thursday. Better than expected planting conditions are weighing on prices. At the same time export sales are down which has helped price break lower. Wheat has held up in the face of the selloff as farmers in the southern Plains are uncovering damage to the wheat crop. The plains region struggled through a severe drought for much of this year. Wheat yields have come in below expectations.

Corn Prices

Corn prices are breaking down after slicing through trend line support near an upward sloping trend line that comes in near 3.86. Target support is seen near the March lows at 3.69. Resistance is seen near former support at 3.86. 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.

Soybean Prices

Soybean prices have broken down through trend line support and are lower in North American trade. Support is seen near the January lows at 939. Support is seen near the former breakdown level at 1007. 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.

Soybean export sales for the 2017/18 marketing year were 164.8 TMT, down 40% from last week and 14% less than the prior 4-week average.  Sales for the 2018/19 crop year totaled 34.7 TMT, lifting combined sales to 199.5 TMT.  Combined sales were down 81% week over week and less than analyst estimates that ranged from 400-1,000 TMT. 2017/18 export commitments are 99% of the USDA forecast with 13 weeks to go and need to average 43 TMT weekly to meet projections. Current sales are 5% behind last year’s pace. Major purchases were reported for Mexico, the Netherlands, and Columbia.

Wheat Prices

Wheat prices are lower in early North American Trade, but remain buoyed. Support is seen near and upward sloping trend line at 5.05, and the 10-day moving average at 524. Resistance is seen near the 10-day moving average at 5.23, and then the May highs at 554. 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.