Wheat Drops as Wet Weather Eases Drought Conditions

Grain prices are mixed on Monday as soybeans edged higher and wheat moves lower. Solid export sales failed to lift wheat prices. Wheat futures are trading under pressure following a wet forecast for the southern Plains. A storm spreading across the region will soak portions of the crop, relieving otherwise parched fields. A drought in the Plains has stressed the wheat crop for several months, resulting in poor crop conditions. While soy bean prices are poised to break out, wheat prices are trading on the defensive.

Corn Prices

Weekly corn export sales for the 2017/18 marketing season of 839.9 TMT, slipped 7% from last week and were 46% below the prior 4-week average.  New crop sales came in as at 56 TMT, lifting combined sales to 895.9 TMT.

Corn prices gapped lower and are trading down nearly 0.45% in early North American trade.  Prices closed through the 10-day moving average on Friday which is now seen as resistance at 387.  Support is seen near the April lows at 372.  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).

Soybean Prices

Soybean prices moved higher but are consolidating.  Resistance is seen near a downward sloping trend line that comes in near 1070.  Support is seen near the 10-day moving average at 1043. 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 export sales for the 2017/18 marketing year totaled 120,700 metric tons, up 11% from last week but 46% less than the prior 4-week average. New crop sales totaled 68 TMT, lifting total sales to 188.7 TMT. Combined sales were down 39% from last week and were below analyst expectations that ranged from 250 to 650 TMT. Export commitments are 91% of the USDA forecast with 8 weeks to go and need to average 267 TMT weekly to meet projections. Export sales are 15% below last year’s commitments during the same time frame.

Wheat prices moved lower on Monday gapping down in early North American trade. Prices gapped through support now resistance at the 10-day moving average at 474. Support is seen near March lows at 441. Momentum is negative to neutral as the MACD is printing in the black with a downward sloping trajectory which points to consolidation.