Grains Consolidate but Poised to Test Higher Levels

Grain prices consolidated on Tuesday in early North American trade as Soybeans and Corn moved higher and Wheat moved lower. Wheat and corn saw minor balance sheet changes in the April WASDE. Wheat ending stocks are raised 30 million bushels to 1.064 billion, all on lower feed and residual use.  The corn balance sheet saw Food/Seed/Industrial use lowered 5 million bushels, as a 10-million-bushel reduction in corn used for glucose and dextrose is partially offset by a 5-million-bushel increase in corn used for starch. Projected feed and residual use is lowered 50-million-bushels to 5.5 billion based on disappearance during first half of the year.  Supply was unchanged while demand was reduced, resulting in a 55-million-bushel increase to ending stocks.

Corn Prices

Corn prices are moving sideways at the upper end of the current trading range. Target resistance is seen near the April highs at 3.92, and then the January highs at 394. Support is seen near the 10-day moving average at 386.5. Momentum is neutral as the MACD (moving average convergence divergence) histogram is printing in the black with a flat trajectory which points to consolidation.

Soybean Prices

Soybean prices moved higher as traders focused on the current fundamentals which is a lack of acreage to potentially meet demand.  Prices are poised to test resistance near the March highs at 1071. Support is seen near the 10-day moving average at 1037. Momentum has turned positive as the MACD (moving average convergence divergence) index 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).

Wheat Prices

Wheat prices moved lower on Wednesday in early trade. Prices are forming a bull flag continuation pattern and bumping up next to resistance near a downward sloping trend line that comes in near 498. Support is seen near the 10-day moving average at 466 and then the March lows at 441. Momentum has turned positive as the MACD (moving average convergence divergence) index 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).