Soybeans Extend Recovery From 10 Years Lows, Corn Breaks Above 200-day MA

Soybeans and corn are trading positive as both commodities are taking profit of technical events and fundamental reasons.
Mauricio Carrillo
Soybeans Extend Recovery From 10 Years Lows, Corn Breaks Above 200-day MA

Soybeans are trading positive for the third day as the oilseed is extending its recovery from 7.790, its lowest level since December 2008, reached on May 13.

Prices of Soybeans collapsed 13% in less than a month from April 15 highs around 8.950 to May 13 minimums at 7.790 a bushel. The decline was motivated by concerns on how the trade war between the United States and China is affecting agricultural products in both countries.

But now, CDFs on Soybeans are sold at 8.272, a 0.44% advance on Thursday as the unit is logging its third day of recoveries from minimums. A mix between a technical bounce and political factors are behind the revival.

There is always hope, but…

Traders are now willing to repurchase soybeans futures after US President Donald Trump said he would meet China’s President Xi Jinping in June at the Group of 20 summit in Japan.

However, China recently said that it will raise tariffs on some US goods starting in June. The market is now concerned about China stopping buying agricultural products from the United States, including soybeans.

Recently, there is news saying that China is exploring other countries where to buy soybeans, corn, and pork products. Also, Chinese television is reporting significant expansions in soybeans areas in Heilongjiang, China’s main grain producing province, this year.

“Clearly, there’s uncertainty about where we’re going from here,” said independent analyst Ken Morrison to Bloomberg. “Both parties have backed themselves into a corner.’

Soybean Technicals conditions

Soybeans daily chart last year

Soybeans are now trading at 8.282, with the unit testing right now the 20-day moving average at 8.316. The unit wasn’t able to break above the mentioned MA level yesterday, and it is happening today again.

Technical conditions suggest that the downside is not yet finished, but the recovery above the 8.040 level was a pivotal event to give bulls hopes for a sustainable recovery.

However, the 8.300 is a crucial level that the seed needs to break and get a close above there. Then, the recovery will have a long route to 8.700, where another set of resistance is waiting for the unit.

Corn accelerates and tests 3.690 level

Maize is logging its fourth consecutive day with gains as the pair accelerated after breaking above the 200-day moving average at 3.598. It then traded as high as 3.699, its highest level since March 27.

Currently, Corn is trading at 3.691, posting 2.76% gains in the day. The pair is now consolidating gains above the 3.682 level that acted as resistance before.

If the pair extends gains above 3.699, it will find resistances at 3.720 and 3.750 before testing the 3.765, 2019 high.

Corn futures rose for technical breaking levels and stop loss triggering, but also for fundamental reasons as rains in the US midwest is giving hopes to farmers for a good season.

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