Between the Wet and the War: Soybean, Corn, and Wheat Resume Rally

Prices of grains had resumed its rally on Thursday after a brief correction performed on Wednesday when soybeans, corn, and wheat got rejections from highs.

Soybeans are extending advance after a small rejection at 8.830 reached on Wednesday. The grain found support at the 50-day moving average level of 8.560, and it is now testing back the 8.800 area.

Corn is trading positive again after a brief setback performed on Wednesday as the pair was sharply sold near to 4.300, its highest level in near three years.

Same story with wheat prices that is resuming its uptrend after trading at 5.146 on Wednesday, but being rejected to 4.760.

Between the wet and the war

Farmers are worried about planting season in the United States due to wet weather while in the southern hemisphere is the contrary, as producers are concern about the absence of rains.

The problem with a late planting is not only the weak production but a possible drought and intense summer heat that can destroy the crop. Experts are saying that it looks like 1983 market.

Also, Bloomberg is reporting that China putting US soybeans purchases on hold amid the trade tensions between the United States and China. Earlier in the year, China agreed to buy 10 million tons of US soybeans. But at the moment, the purchases have stopped at just 3 million.

People familiar to the matter said that the Asian country doesn’t have plans to cancel orders it has already made.

Crop progress remains weak

According to the latest USDA Weekly Weather and Crop Bulletin, planting remains well behind national historical averages.

By May 26, producers had planted 58% of the US corn acreage, 32% points behind both last year and the 5-year
average.”

Soybean has been planted in 29% of acreage by May 26, 45 points behind last year and 37 points behind the 5-year average. 66% of US winter wheat lands had reached the headed stage, 5% points behind last year and 10 points behind the 5-year average.

Soybeans trades above 200-day moving average again

Prices of soybeans are rallying for the fourth day in a row as investors are digesting wet weather and trade war news. Yesterday Soybean jumped to its highest level since April 17, but it got a rejection that sent it back to the 50-day moving average at 8.555.

However, on Thursday, the oilseed resumed its uptrend, and after confirming the 8.555 area as reliable support. It is now trading back above the 200-day moving average at 8.698.

To the upside, soybean prices will see immediate resistance at the 8.800 area. Above there, 9.00 is the next level to watch. To the upside, the 50-day moving average is now solid support that can be followed by the 200-day MA at 8.700 if the unit closes today above that level.

Corn logs another 4% daily raise

Prices of corn are rallying again on Thursday after a temporary retracement performed on Wednesday after the unit got a rejection at 4.300, its highest level since June 2016.

Farmers and investors are anxious about the season due to wet conditions delaying planting and the coming summer for a delayed crop.

Corn is currently trading at 4.250, just ahead of the 4.300, yesterday high. The unit confirmed the 4.040 as a solid support after two days of small corrections, but the level was strong enough to keep corn above that.

The next important support is the 4.375, double top performed on July 2015 and June 2016.