Daily Grains Analysis for March 23, 2018

Managed money remains offsides in all three major grain categories, leaving the market vulnerable to a further slide in prices. China is preparing to hit US agricultural goods with tariffs, which could further weigh on grain prices. Among the items on the list for targeting are soybeans, live hogs, and sorghum, though those plans could yet change. The threat of a trade war with China has weighed on agricultural markets in recent days, with soybean farmers and others relying on exports to China.

Corn Prices

Corn prices broke down through trend line support and have consolidated below this level which is seen as resistance at 3.78. Additional resistance is seen near the 10-day moving average at 380.  The first level of support is seen near the 50-day moving average at 367. Momentum has turned negative as the MACD (moving average convergence divergence) index recently generated a crossover sell signal.  The MACD histogram is printing in the red with a downsloping trajectory which points to lower prices.

Soybean Prices

NOPA data showed that soybean oil stocks continued to rise and moved higher than expected.  Stocks were up 7.4% month over month to 1.856 billion pounds and are 4.9% higher than they were at this time last year. Weekly soybean oil exports were down 7% but were 7% more than the prior four-week average.

Soybean prices broke down and continue to trade below resistance which was former support near the 10-day moving average at 1033. Prices are poised to test the 50-day moving average which is seen as target support near 1010.  Negative momentum has accelerated as the MACD (moving average convergence divergence) index prints in the red with a declining trajectory which points to lower prices.

Wheat Prices

Wheat prices are rebounded from support levels and are higher by more than 1% in early trade on Thursday.  Target resistance on wheat is seen near former support and the 10-day moving average t 472. Support is seen near the March low at 446. Negative momentum is beginning to decelerate as the MACD histogram is printing in the red with an upward trajectory which points to consolidation.