Daily Grains Analysis for March 5, 2018

Grains prices moved higher as soybean export sales surged.  Soybean export sales for the 2017/18 marketing year came in at 857.9, significantly higher than last week’s marketing year low, and 110% over the prior 4-week average.  Sales for the 2018/19 crop year totaled 122.1 TMT, lifting combined season sales to 980 TMT.  Combined sales were noticeable higher week over week and exceeded analyst estimates that ranged from 300 to 800 TMT. 2017/18 export commitments are 80% of the USDA forecast with 27 weeks to go and need to average 428 TMT weekly to meet projections. Current sales are 13% behind last year’s pace. Major purchases were reported for Mexico, China, and Egypt.

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.

Corn Prices

Corn prices opened higher on Friday notching up a fresh 6-month high. 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 370. 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 1039. Resistance is seen near the January 2017 highs at 1080. 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 79 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. Short-term support is seen near the 10-day moving average 4.67. 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.