Daily Grains Analysis for February 28, 2018

Grains prices continued to climb, closing higher on a weekly basis for the fifth time in the past six weeks.  The USDA’s annual Agricultural outlook forecasts soybean production at 4.320 billion bushels, 2% below last year, with a 48.5 bushel per acre average. The bushel per acre average is down 0.6 bushels from last year and 3.5 bushels below the 2016 record. Export activity for the week came in as a net reduction to sales for the 2017/18 crop year due to cancellations from china.  2018/19 export sales were 222.1 TMT.  Combined season sales were down 87% week over week.    Total export commitments are 78% of projections with 28 weeks to go and need to average 444 TMT in weekly sales to meet forecast. Current export sales are 14% behind last year’s pace.

Corn Prices

Corn prices remained above support seen near the 10-day moving average at 3.667 per bushel. Hedge fund traders added to long positions and reduced short position in futures and options according to the latest commitment of trader’s report released for the date February 20, 2018. The first level of target resistance is seen near the February highs at 3.68 per bushel. Additional resistance is seen near the 2017 highs at 3.94. 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

Soybean Prices

Soybean prices whipsawed on Monday making a fresh 12-month high but then reversing and closing on the lows of the session which is an outside reversal day. This generally appears at the end of an uptrend and could weigh on prices. On Tuesday soybeans rebounded in early North American trade.  Support on soybeans is seen near the 10-day moving average at 1027. Resistance is seen near the February 2017 highs at 1063. Momentum is turning neutral as the  MACD (moving average convergence divergence) prints in the black with a declining trajectory which points to consolidation.

Wheat Prices

Wheat prices moved higher in early north American Trade. Short-term support is seen near the 10-day moving average 4.556. Resistance is seen near the February highs at  467. Momentum is neutral, but turning positive as the MACD (moving average convergence divergence) histogram prints in the red with an increasing trajectory pointing to a possible crossover buy signal.