Daily Grains Analysis – Corn and Soybeans Sag as Dollar Gain Traction

Grain prices edged lower in early North American trade on Friday. Prices are pausing as the forecast for dry weather in Argentina, shows the possibility of some rain in around two weeks, which is also encouraging selling. Weekly export sales were mixed, with corn benefitting from a recent uptick in global business while soybeans and wheat sales were underwhelming.

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 3.57. 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.  The relative strength index is printing a reading of 69, just below the oversold trigger level of 70.

Soybean Prices

Soybean prices are lower on Friday in early morning trade. Prices dropped through the 10-day moving average at 989 per bushel, which is now seen as resistance.  Support is seen near the November lows at 9.58. 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 prices continued to decline on Wednesday but were able to rebound from session lows in early trade on Friday ahead of the U.S. jobs report.  A rebound in the dollar helped weigh on prices. Support on wheat futures prices is seen near the 10-day moving average at 4.41 per bushel. Additional support is seen near the former breakout level which is a downward sloping trend line that comes in near 4.30.

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. The RSI (relative strength index) hit resistance near the 70 oversold trigger level and moved lower reflecting decelerating positive momentum.