Daily Grain Analysis – Soybeans Rise on NOPA report, Corn and Wheat Consolidate

Grain prices are starting to diverge following the National Oilseed Processing Association’s reported on crushing. Strong demand for soybean meal has lifted the entire soybean complex, following the blowout number.  Corn and wheat prices remain subdued by the short position amassed by hedge funds could lead to a short squeeze in corn.

Corn Prices

Corn prices continue to consolidate but hedge funds continue to line up on the short side which could lead to a robust short-squeeze. According to the latest commitment of trader’s report released for the date ending January 16, 2018, managed money increased short position in futures and options by 14K contracts while also increasing long position in futures and options by 9K contracts. Open interest that is short futures and options outnumbers open interest that is long futures and options by 227K contracts which is more than double and could generate a significant short squeeze.

Corn prices are attempting to form a bottom but needs to break out above resistance which is a downward sloping trend line that comes in near 3.51 per bushel. Support near the 10-day moving average at 3.50. 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 were buoyed following the National Oilseed Processing Association reported a December crush of 166.4 million bushels that was the largest monthly total on record. The total was one million bushels above the previous record of 165.4 million bushels that was set in December 2014, one million bushels above market expectations.

Soybean prices continued to climb rebounding after holding support near the January lows at 9.37 per bushel. Support is seen near the 10-day moving average at 9.64 per bushel.  Resistance for soybeans is seen near a downward sloping trend line that comes in near 10.10 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 remain subdued and continue to grind sideways.  According to the latest commitment of trader’s report released for the date ending January 16, 2018, managed money increased short position in futures and options by 10K contracts while decreasing long position in futures and options by 3.5K contracts. Open interest that is short futures and options outnumbers open interest that is long futures and options by 143K contracts which is more than double and could generate a significant short squeeze.

Prices are hovering below the 10-day moving average at 4.25 per bushel which is seen as resistance. Momentum remains negative as the MACD (moving average convergence divergence) index prints in the red with a downward sloping trajectory which points to lower prices.