Grains Surge Higher Led by Soybeans and Wheat

David Becker
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Grain prices rebounded on Monday following a bumpy ride last week as the fundamentals were tossed aside as trader’s focused on trade issues. With China threatening to add a 25% tariff on soybeans, prices were extremely volatile.

Corn Prices

Corn prices tested resistance at 392 but were unable to make a fresh high and settled back into the current range.  Support is seen near the 10-day moving average at 383. Momentum is positive as the MACD (moving average convergence divergence) histogram is printing in the black with an upward slowing trajectory which points to higher prices.

Soybean Prices

The USDA’s February soybean crush data showed some variance from the data NOPA had previously reported.  Per the USDA, 164,959,067 bushels of beans were crushed during the month of February. This resulted in 1.889 billion pounds of oil and 3.652 million tons of meal. The crush declined by 5.55% from January. Oil production fell 5.3% and meal output was 5.4% lower. Month ending stocks for soybean meal increased 19% to 415,077 tons, partially offsetting last month’s 25% decline. Crude oil stocks added to last month’s 19% rise by adding climbing an additional 9% to 2.05 billion pounds and reaching their highest level since May of 2016.

Soybean prices rebounded sharply for the second consecutive trading session following last week’s drop in the wake of Chinese tariffs. Support is seen near the 10-day moving average at 1030.  Resistance is seen near the April highs at 1060. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occur 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 gapped higher on Monday after rebounding on Friday and breaking out of a consolidation pattern. Support is seen near former resistance near the February highs at 467. Target resistance is seen near the March highs at 553. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occur 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).

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