Daily Grains Analysis for March 2, 2018

Grains prices are mixed in early North-American trade on Thursday.  Prices appear to be taking a breather as the risk off trade continues. Soybean oil stocks are experiencing a very quick build over the prior three-month period, which could weigh on soybeans.  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.

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 opened lower on Thursday after notching up a fresh 6-month intra-day high on Wednesday. The first level of target resistance is seen near the July highs at 3.94 per bushel. Support on corn is seen near the 10-day moving average at 368. 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 and continue to climb. Support on soybeans is seen near the 10-day moving average at 1034. 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 75, is above the overbought trigger level of 70 and could foreshadow a correction.

Wheat Prices

Wheat futures prices surged to a fresh 6-month high 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.

Short-term support is seen near the 10-day moving average 4.61. Resistance is seen near the July highs at 5.94. 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.