Grains Continue to Consolidate at Elevated Levels

The strength of the U.S. dollar is generating a wall of worry for grain prices, which has capped further upside.  A slowdown in planting due to cold and wet April and May weather has eased allowing farmers to catch up.  Export sales have been mixed, which reflects inconsistent demand for all three major crops.

Corn Prices

Corn prices rebounded back above the $4 handle in early North American trade after whipsawing and closing lower on Thursday. Prices broke out above the 3.99 highs and are poised to test target resistance near the June 2016 highs at 4.39.  Support is seen near the 10-day moving average at 3.95.  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).

Soybean Prices

Soybean prices are higher on Friday after closing below support near an upward sloping trend line that comes in near 997. Resistance is seen near the 10-day moving average at 1006. Momentum is negative to neutral as the MACD (moving average convergence divergence) histogram prints in the red with a flattening trajectory which points to consolidation.

Soybean export sales for the 2017/18 marketing year came in at 281.9 TMT, down 20% from last week and 48% less than the prior 4-week average.  Sales for the 2018/19 crop year totaled 224.7 TMT, lifting combined sales to 506.6 TMT.  Combined sales were down 20% week over week but within analyst estimates that ranged from 400-1,000 TMT. 2017/18 export commitments are 89% of the USDA forecast with 16 weeks to go and need to average 432 TMT weekly to meet projections. Current sales are 3% behind last year’s pace. Major purchases were reported for Egypt, Mexico, and the Netherlands.

Wheat Prices

Wheat prices surged higher in early North American trade recapturing resistance, which is now support near the 10-day moving average at 5.05. Support is seen near the 50-day moving average at 4.81. Negative momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in the red with a rising trajectory which points to consolidation.