Daily Grain Analysis – Wheat Continue to Trend Higher

Grain prices consolidated but remain on an upward trajectory as the dollar whipsawed following comments from Trump on Thursday in an interview with CNBC, which discussed his strong dollar view. Corn, soybeans and Wheat are priced in dollars, which makes a weaker dollar beneficial for grain prices.  Soybean oil demand appears to be softening, which is generating a mixed fundamental view of the soybean complex.

Corn Prices

Corn prices broke out of a 3-month trend and remain above trend line support on Friday, which was former resistance at 354.5. Target resistance is seen near the August highs at 3.75.  Support on corn prices is seen near the 10-day moving average at 3.52.

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 are facing headwinds and tailwinds. Soybean meal prices are riding high due to strong demand from meal, but slowing domestic soybean oil demand, which could raise analysts’ estimates of 2017/18 US soybean oil ending stocks, could weigh on prices. NOPA reported end-of-December soybean oil stocks were 1.54 billion pounds, which was more than 150 million pounds above market expectations.

Soybean prices are grinding higher.  Prices continue a slow uptrend after breaking out of a bull flag pattern that is a pause that refreshes higher. Support is seen near the 10-day moving average at 9.77 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 broke out mid-week and continue to rise and are poised to test a downward sloping trend line that connects the highs in September to the highs in January and comes in near 4.33. Target resistance is seen near the September highs at 4.66. Support on the Wheat is seen near the former break out level and then the 10-day moving average at 4.25.

Momentum has turned positive as the MACD (moving average convergence divergence) index 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.