Daily Grain Analysis – Wheat, and Corn Break out on Weaker Dollar

Grain prices broke higher lead by wheat which surged as a weaker dollar made commodity products that are quoted in dollar more attractive.  The dollar decline was somewhat halted following clarification by the U.S. Treasury Secretary Steve Mnuchin. Mnuchin said that the dollar is “not a concern of mine,” though he conceded that he believes in a strong dollar based on long-term fundamentals while affirming that he supports free-floating currency markets. He termed prevailing dollar weakness as being short term, with short-term benefits for U.S. trade, and argued that trade should be “reciprocal and fair”.

Corn Prices

Corn prices broke out of a 3-month trend, closing on Wednesday above trendline resistance, and poised to test the October highs near 3.55 per bushel. A break of this level would lead to a test of the August highs at 3.75.  Support on corn prices is former resistance seen near the trend line break out level near 3.51 which coincides with the 10-day moving average.

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 continue to climb buoyed by strong demand for soybean meal.  Prices surged on Wednesday and continue to climb on Thursday. Prices broke out of a bull flag pattern that is a pause that refreshes higher. Support is seen near the 10-day moving average at 9.72 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 soared higher on Wednesday and continue to push through resistance levels on Thursday. A downward sloping trend line that connects the highs in September to the highs in January and comes in near 433. 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.