Daily Grains Report for January 22, 2018

Grain prices have been trading under pressure since early January following the most recent World Agriculture report released by the U.S. Department of Agriculture. Corn, Soybean, and Wheat production in the United States were in line with expectations but showed that acres used to grow grains increased, while South American yields were buoyed. Demand remains steady for soybean, as exports of soybean meal continue to attract Asian buyers, but wheat demand is subdued which is weighing on prices.

Corn Prices

In its latest WASDE report the USDA reported that corn production was larger than expected targeting food and see use, as feed demand is expected to be lower. The USDA reported that Corn production is estimated at 14.604 billion bushels, up 26 million from December. The USDA also reports that foreign production is lower, citing Russia’s corn production which is lower based on harvest results.

Corn prices are attempting to form a bottom and are trying to break out above resistance which is a downward sloping trend line that comes in near 3.50 per bushel, which coincides with additional support near the 10-day moving average. 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.

Soybean Prices

Soybean production was slightly lower than initially anticipated according to the latest WASDE report. The USDA revealed that U.S. production for 2017/18 is estimated at 131.3 million tons, down 0.9 million from last month. Soybean production is estimated at 4,392 million bushels, down 33 million on lower yields.

Soybean prices are rebounding after holding support near the January lows at 9.37 per bushel. Support is seen near the 10-day moving average at 961 per bushel.  Resistance for soybeans is seen near a downward sloping trend line that comes in near 10.05 per bushel. 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.

Wheat Prices

Wheat prices have been trading under pressure and as opposed to other grains, the strong harvest has capped upside price action.  The USDA reported that U.S. wheat ending stocks are raised 29 million bushels on increased supplies and decreased use. This will make it difficult for prices to rise as supply continues to outpace demand.

Prices are hovering near the 10-day moving average at 4.26 per bushel as resistance is seen near a downward sloping trend line at 4.26. Momentum remains negative as the MACD (moving average convergence divergence) index prints in the red with a downward sloping trajectory which points to lower prices.