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Wheat Drops as Weather Forecast Reduces Risk of Cold Weather

By:
David Becker
Updated: Apr 12, 2018, 12:44 UTC

Grain prices closed near their lows on Wednesday and are experiencing mixed results on Thursday. Wheat appears to be giving back the most as the cold

Wheat Drops as Weather Forecast Reduces Risk of Cold Weather

Grain prices closed near their lows on Wednesday and are experiencing mixed results on Thursday. Wheat appears to be giving back the most as the cold weather that helped buoy prices is now past. Prices are down more than 1.9% in early North American trade.

Corn Prices

Corn prices are down slipping through support, which is now seen as resistance near the 10-day moving average at 387. Target resistance is seen near the April highs at 3.92, and then the January highs at 394. Support is seen near the April lows at 372. Momentum is neutral to negative as the MACD (moving average convergence divergence) histogram is printing near the zero index level with a flat trajectory which points to consolidation.

Soybean Prices

The Malaysian palm oil board monthly supply and demand figures for March showed palm exports improved, befitting from the Jan 8th three-month suspension of export tariffs on CPO. This could weigh on soybean oil and soybean prices. This suspension was recently extended until April 30thto help clear high stock levels. Cyclically, palm exports slow in November and begin to gain traction in March/April. During March, palm exports jumped 19% to 1.565 million metric tons, a 19-month high. March exports were up 252,181 MT from February and 299,546 MT more than was shipped in March of 2017.

Soybean prices moved higher but are consolidating in a tight range.  Resistance is seen near a downward sloping trend line that comes in near 1070.  Support is seen near the 10-day moving average at 1039. 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).

Wheat Prices

Wheat prices moved lower on Thursday after closing near its lows on Wednesday. Prices are forming a bull flag continuation pattern and bumping up next to resistance near a downward sloping trend line that comes in near 498. Support is seen near the 10-day moving average at 469 and then the March lows at 441. Momentum is positive to neutral as the MACD recently generated a buy signal but the trajectory of the MACD histogram is pointing downward reflecting consolidation.

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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