Daily Grains Analysis for February 15, 2018

Grain prices continued to move higher on Thursday in early North American trade. Soybean prices are in the process of breaking out while corn and wheat are still facing stiff resistance. Soybean oil stocks are at the high end of the range for this time of year and will end January at 1.7 billion pounds with an average of 1.6 billion pounds. If realized, the average would be a 65-million-pound increase from end-of-December stocks of 1.54 billion pounds.

Corn Prices

An improving supply-and-demand outlook based on an increasingly concerned by hot-and-dry weather in Argentina, is now expected to cut into this season’s production. Weather forecasters said rain due next week wouldn’t be enough to offset increasing stress on the crops.   On the other, a recent pickup in U.S. corn exports has helped buttress prices. The U.S. Department of Agriculture said on Wednesday morning that private exporters sold 123,000 metric tons of corn to unidentified customers in 2017-18. Government forecasters expect the uptick in corn sales to eat into projected grain stockpiles.

Corn prices closed off their highs Wednesday after testing resistance. Support is seen near the 10-day moving average at 3.644 per bushel. The first level of target resistance is seen near the August highs at 3.75 per bushel. Additional resistance is seen near the 2017 highs at 3.94. Momentum is accelerating higher as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.

Soybean Prices

Soybean prices broke out above trend line resistance on Wednesday and continues to show an upward bias on Thursday in early North American Trade.  Support on soybeans is seen near former resistance at the trend line break out at 1010 and then the 10-day moving average at 993.5. Resistance is seen near the July  highs at 1027. Momentum has turned positive as the MACD (moving average convergence divergence) recently generated a crossover buy signal. The MACD histogram prints in the black with an upward sloping trajectory which points to higher prices.

Wheat Prices

Wheat prices opened lower and continue to trade below resistance levels in early North American trade. Short-term support is seen near the 10-day moving average 4.534, and then an update sloping trend line at 4.48. Resistance is seen near a downward sloping trend line that comes in near 457, and then the February highs at 4.67. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints near the zero-index level with a flat trajectory which points to consolidation.