Grain Price Forecast – Soybeans and Corn Rebound after Sharp Selloff

Grain prices rebounded in early North American trade after breaking down on Monday lead by a sharp drop in soybean. Prices have been trading under pressure as planting has caught up. Trumps meeting with the G7 did little to calm the fears of traders, as tariffs and a wide breadth of products appear to be in the cards.  Soybean oil prices remain under pressure due to growing inventories.

Corn Prices

Corn prices are edging higher after breaking down and poised to test target support near the 200-day moving average at 3.63. Resistance is seen near the 10-day moving average at 3.81. Momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices. The RSI rebounded after touching the oversold trigger level of 30.

Soybean Prices

Soybean prices are higher in early North American trade after tumbling through trend line support on Monday. Resistance is seen near former support at 961. Support is seen near the January lows at 937. Momentum is negative as the MACD (moving average convergence divergence) histogram is printing in the red with a downward sloping trajectory which points to lower prices. The RSI has rebounded slightly after hitting the oversold trigger level of 30 which could foreshadow a correction.

The estimated soybean crush margin improved during the week ending June 7th.  The value received from oil and meal sales per bushel of soybeans crushed fell 36-cents, moving from $12.35 to $11.99 in Central IL. The cost of soybeans decreased 43-cents to $9.60 per bushel, allowing the margin to expand 7-cents to $2.39 per bushel. Soybean oil prices remain under pressure due to growing inventories and appear likely to re-test support at the low of the year of 30.15 for crude degummed at the Chicago Board of Trade. The estimated margin this week is up 82% from where it stood a year ago.

Wheat Prices

Wheat prices are higher in early North American Trade. Support is seen near and upward sloping trend line at 5.10. Resistance is seen near the 10-day moving average at 518. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.