Grains Rebound Following Kudlow’s Comments on Trade

Grain prices rebounded following comments from Trump Economic Advisor Kudlow who warned against an overreaction to the trade action, though he understands the market’s anxiety. The free-trader was also asked if the U.S. could lose a trade war and responded: “No, I don’t see it that way, this is a negotiation, using all the tools.” He noted further that the U.S. trade actions are about “holding to laws and customs of free trade” and not about trade wars. White House endorsed Kudlow’s comments, which it confirmed were meant to reassure markets and reflect the White House’s position.

Corn Prices

Corn prices rebounded sharply into the close following Kudlow’s comments after declining more than 3%, in the wake of the news of a 25% tariff set by Chinese officials on imported soybeans. Prices recaptured resistance near the 10-day moving average at 380, which is now seen as support. Target resistance is seen near the April highs at 3.92. Momentum is neutral as the MACD (moving average convergence divergence) histogram is printing in the red with a flat trajectory which points to consolidation.

Soybean Prices

Soybean prices rebounded but could have a massive supply overhang if they do not have a destination to export to like China.  Prices bounced at support near the 100-day moving average at 997. Resistance is seen near the 10-day moving average at 1027. Momentum is negative as the MACD histogram is printing in the red with a down sloping trajectory which points to lower prices.

Wheat Prices

Wheat prices are higher early on Thursday after rebounding following Kudlow’s comments. Prices continue to form a bear flat pattern which is a pause that refreshes lower. Support is seen near the 10-day moving average at 453 and then the March lows at 441. Resistance is seen near the April highs at 463. Momentum is turning MACD histogram is printing in the red with an upward sloping trajectory which points a MACD crossover buy signal.