Grains Move Higher But Failed to Breakout Following Cancellation of North Korean Summit

Grain prices are higher in early North American trade but whipsawed on Thursday following the decision by the White House to pull out of the June 12 meeting in Singapore with the North Koreans. Weekly corn export sales were down 13% from last week and 0.6% more than the prior 4-week average.  New crop sales of 273.4 TMT lifted combined sales to 1,127.7 TMT. Total sales were within analyst expectations that ranged from 80 to 1,350 TMT. Increases were reported for South Korea, Mexico, and Japan.

Corn Prices

Corn prices hit fresh 2-year highs on Thursday but closed lower following the cancelation of the North Korean summit. Target resistance remains near the June 2016 highs at 4.39.  Support is seen near the 10-day moving average at 4.01.  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). The MACD histogram is printing in the black with an upward sloping trajectory which points to higher prices.

Soybean Prices

Soybean prices are up early North American trade but failed to close above trend line resistance on Thursday. Resistance is seen near a downward sloping trend line at 1065. Support is seen near the 10-day moving average at 1019. 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 export sales for the 2017/18 marketing year came in at net reduction to sales of 139.5 TMT, down significantly from last week and the prior 4-week average. Sales for the 2018/19 crop year totaled 6.9 TMT, lifting combined sales to a negative 132.6 TMT.  Combined sales were down 640.2 TMT week over week but within analyst estimates that ranged from negative 200-400 TMT. 2017/18 export commitments are 89% of the USDA forecast with 15 weeks to go and need to average 470 TMT weekly to meet projections.

Wheat Prices

Wheat prices failed to break out on Thursday but are higher in North American trade. Resistance is seen near the July highs at 553. Support is seen near the 10-day moving average at 511. 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).