Daily Grains Analysis for February 26, 2018

Grain prices are slightly higher despite a bearish tone for soybeans which has been ignored as acreage will likely catch up with corn plantings in 2018, according to the USDA. Additionally, soybean oil stocks are experiencing a very quick build over the prior three month period.  According to NOPA, stocks have climbed from 1.224 billion pounds to 1.728 and could be easily threatening their near-term high of 2.058 billion pounds, reached in 2014 if demand doesn’t pick up soon.

Corn Prices

Corn prices continue to consolidate, but have recaptured former resistance now support near the 10-day moving average at 3.66 on.  The first level of target resistance is seen near the August highs at 3.75 per bushel. Momentum is negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

Soybean Prices

Soybean prices continued to move higher despite news that the USDA sees more soybeans planted in the coming season. Additionally, soybean oil stocks are experiencing a very quick build over the prior three month period.  According to NOPA, stocks have climbed from 1.224 billion pounds to 1.728 and could be easily threatening their near-term high of 2.058 billion pounds, reached in 2014 if demand doesn’t pick up soon.

Prices are forming a bull flag pattern which is a pause that refreshes higher. Support on soybeans is seen near the 10-day moving average at 1018, and then a downward sloping trend line that comes in near 1010. 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.  The RSI (relative strength index) is moving higher reflecting accelerating positive momentum. The only caveat is the current reading of 70.38 is above the overbought trigger level of 70 and could foreshadow a correction.

Wheat Prices

Wheat prices edged higher but continue to trade below resistance which is seen near the 10-day moving average at 4.547. Support is seen near the weekly low at 4.44. Momentum is negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the MACD line).