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Grain Prices Rebound Led by Wheat but Corn and Soybeans Trade Heavy

By:
David Becker
Published: Jun 7, 2018, 11:19 UTC

Grain prices are higher in early North American trade, led by a surge in wheat which is up nearly 2%. Prices were buoyed as China offered to import an

Grain Prices Rebound Led by Wheat but Corn and Soybeans Trade Heavy

Grain prices are higher in early North American trade, led by a surge in wheat which is up nearly 2%. Prices were buoyed as China offered to import an extra $70 billion in U.S. agricultural, energy, commodities and manufactured goods over a 2-year period. Better than expected planting conditions are weighing on prices. Farmers in the southern Plains are uncovering damage to the wheat crop. The plains region struggled through a severe drought for much of this year. Yields have come in below expectations. Dry weather in southern Russia lingers, stressing the wheat crop in the world’s most important growing region.

Corn Prices

Corn prices are consolidating after breaking down through trend line support near an upward sloping trend line that comes in near 3.86. Support is seen near the June lows at 3.80. 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.

Soybean Prices

Soybean prices are nearly unchanged in early North American trade after breaking through support near an upward sloping trend line that come in near 995, which is now seen as resistance. Support is seen near the April lows at 993. 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.

Soybean planting moved from 77% complete to 87% over the past week.  South Dakota made the most progress, getting 26% of its crop planted. 68% of the soybean crop is emerged, up from 47% last week and 16 points over its five-year average of 52%.  Soybean crop conditions show that 75% of the crop is rated good to excellent and 4% as poor to very poor.  Conditions are improved from a year ago where 66% of the crop was seen as good to excellent and 6% as poor to very poor.

Wheat Prices

Wheat prices are higher in early North American Trade. Support is seen near and upward sloping trend line at 5.05,and the 10-day moving average at 524. Resistance is seen near the May highs at 554. 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.

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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