Daily Grains Analysis for March 8, 2018

Grain prices were mixed early on Wednesday in North American trade. The risk off trade which ensued following the Departure of Economic advisor Gary Cone is weighing on prices.  Hedge funds reduced short positions in corn futures and options according to the latest commitment of trader’s report, helping to push prices above resistance levels.

Corn Prices

Corn prices moved higher and remain buoyed as the grain generated a bull flag pattern.  Support is seen near the 10-day moving average at 3.74 per bushel. The first level of target resistance is seen near the July highs at 3.94 per bushel. Momentum is accelerating higher as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices.  The RSI continues to moved sideways but the current reading of 77, is above the overbought trigger level and could foreshadow a correction.

Soybean Prices

Soybean prices rebounded from its lows but were lower in early North American trade.  Hedge fund added to long position in futures and options and reduced short position according to the latest commitment of trader’s report. According to the CFTC managed money increased long position in futures and options by 37K and reduced short position by 10.8K contracts. The current open interest shows that longs outnumber shorts in futures and options by nearly 12-fold, setting the market up for a long liquidation if adverse data is revealed.

Support on soybeans is seen near the February lows at 1049. Resistance is seen near the January highs at 1080. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints in the black with a downward sloping trajectory which points to consolidation. The RSI (relative strength index) is moving sideways and is printing a reading of 74, which is above the overbought trigger level of 70 and could foreshadow a correction.

Wheat Prices

Wheat prices bounced from session lows and were nearly unchanged in early North American trade. Short-term support is seen near the 10-day moving average 4.76. Prices are consolidating after breaking out and forming a bull flag pattern which is a pause that refreshes higher. Resistance is seen near the July highs at 5.53. Momentum is positive as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices. The RSI (relative strength index) is moving sideways which reflects consolidation as it prints a reading of 69.5 at the upper end of the neutral range.