Daily Grains Analysis – Wheat Takes a Respite Despite Drought Conditions

Grain prices finally pulled back on Wednesday, after running led by Wheat on the heal of dry conditions for winter wheat. A sharp decline in winter wheat conditions in the Great Plains, where farmers are struggling through a drought, prompted a rally Hard Red Winter wheat, which led grains higher.  The dollar continued to trade under pressure on Wednesday which should continue to boost grain prices.

Corn Prices

Corn prices took a respite from its recent climb on Wednesday early in the North American trading session. Prices could retrace back to their breakout level which is a downward sloping trend line which was former resistance that is now support near 3.55 per bushel. The first level of support is seen near the 10-day moving average at 3.555. Resistance is seen near the August highs at 3.76. Momentum has turned positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal.  This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Soybean Prices

Soybean prices have been weighed down by softer than expected export sales of bean oil. Export sales of soybean oil were in line with expectations last week, but declined by 58%, and were 47% below the 1-month average.  Expectations were for a decline of 42% compared to last year’s export sales commitments. The decline in bean oil demand has pushed the oil share to the lowest levels since August of 2016, making a fresh 18-month low.

Soybean prices are lower on Wednesday in early morning trade. Support is seen near the 10-day moving average at 987 per bushel.  Resistance for soybeans is seen near a downward sloping trend line that comes in near 10.05 per bushel. Momentum is positive but slowing as the MACD histogram is printing in the black with a flattening trajectory which points to consolidation.

Wheat Prices

Wheat prices have slipped on Wednesday trading lower after closing higher for 5-consecutive trading session. Dry weather throughout the plains should continue to buoy prices. Support on wheat futures prices is seen near the 10-day moving average at 4.36 per bushel. Wheat prices are poised to test the August highs at 4.62. A break of this level could lead to a test of the July highs at 5.55.  Momentum has turned positive as the MACD (moving average convergence divergence) index recently generated a crossover buy signal.  The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.