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Grains Rebounds but Positive Planting Results Weigh on Prices

By:
David Becker
Updated: Jun 6, 2018, 11:55 UTC

Grain prices are higher in early North American trade. Prices were buoyed as China offered to import an extra $70 billion in U.S. agricultural, energy,

Grains Rebounds but Positive Planting Results Weigh on Prices

Grain prices are higher in early North American trade. 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. Trump will reportedly meet with his trade advisors to discuss how to proceed with the offer, which seems to be well shy of the $200 billion a year he demanded in trade deficit reductions with China. Better than expected planting conditions are weighing on prices.

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.

Corn planting moved from 92% complete to 97% over the past week, up 5 points and two points ahead of both last year’s pace and the five-year average. Both Illinois and Missouri have completed planting and finished ahead of their average pace. 10 other states have completed at least 95% of their planting. Michigan and Pennsylvania made the most progress during the latest week by planting 16% of their crop. 86% of the corn crop has emerged, up 14 points from last week and 3 points ahead of the 5-year average. Crop conditions slipped a point in the good to excellent category. 78% of the crop is rated good to excellent and 3% as poor.  Last year at this time, 68% of the crop was rated good to excellent and 6% as poor to very poor.

Soybean Prices

Soybean prices edged higher in early North American trade holding above support near an upward sloping trend line that come in near 995. Resistance is seen near the 10-day moving average at 1021. 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.

Wheat Prices

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