Daily Grains Analysis for March 1, 2018

Grains prices continued to climb, with all three major grains rising.  Weather forecasts for Argentina are slightly drier next week, while some showers are expected in western parts of the crop belt. Analysts say Argentina’s stressed crops are approaching a critical period, which has sparked strong buying interest. 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.

Corn Prices

Corn prices pushed higher notching up a fresh 6-month high. 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. Support on corn is seen near the 10-day moving average at 367. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Soybean Prices

Soybean prices surged to a fresh 12-month high reversing the outside reversal day seen two days prior. Support on soybeans is seen near the 10-day moving average at 1031. Resistance is seen near the February 2017 highs at 1063. Momentum has turned positive as the RSI turning higher reflecting accelerating positive momentum. The current reading of 74, is above the overbought trigger level of 70 and could foreshadow a correction.

Wheat Prices

Wheat futures rise as crops in the southern Plains deteriorate amid a drought. The USDA said that 12% of Kansas wheat was in good-or-excellent condition, down from last month, while Oklahoma’s crop was rated 4% good or excellent. Dry weather there has sparked bets that this year’s crop could be smaller. Drought continues in Argentina, too, where it is primarily a threat to corn and soybean supplies.

Wheat prices moved higher breaking through trend line resistance and poised to test target resistance near the 61.8% Fibonacci retracement level of 4.89. Short-term support is seen near the 10-day moving average 4.57. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.