Daily Grains Analysis for March 15, 2018 – Corn Breaks Higher

David Becker

Grain prices are higher in early North-American trade on Thursday. Hedge fund significantly added to their long position in futures and options which is helping to buoy prices. NOPA delayed its crush report giving soybean a boost.

Corn Prices

Corn prices surged and broke out and are poised to test the July highs at 394. Support is seen near the 10-day moving average at 3.82 per bushel. Positive momentum is re-accelerating as MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.  The RSI moved higher in tandem with price action reflecting accelerating positive momentum.

Soybean Prices

Hedge funds continued to add to long position in futures and options according to the latest commitment of trader’s report, helping to buoy prices. Expectations for month-ending soybean oil stocks at NOPA facilities range from 1.65 billion to 1.84 billion pounds with an average of 1.77 billion. If realized, the average would represent a 38-million-pound increase from last month and a 4-million-pound decrease from last year. Estimates of end-of-February stocks at 1.64 billion pounds, which implies industry-wide stocks of 2.33 billion pounds. These estimates represents 36.7 days of projected usage in March, which, if realized, would be down three days from January but would be generally in line with last year’s days of coverage.

Soybeans rebounded after closing at session lows on Wednesday but have been unable to take out Wednesday’s highs. Prices are forming a bear flag pattern which is a pause that refreshes lower. Resistance is seen near the 10-day moving average at 1047, while support is seen near the former breakout level at 1008. Momentum has turned 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).

Wheat Prices

Wheat prices opened lower on Thursday and continue to form a bull flag pattern which is a pause that refreshes higher. Support is seen near the former breakout level at 469. Resistance is seen near the 10-day moving average 4.94. Momentum has turned 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).

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