Corn Extends Gains but Shows Signs of Exhaustion, Soybeans Advances

Corn and soybeans reach fresh highs on Monday as investors are worried about plating conditions and its impact in grains season.

Reports from Reuters and CNBC are saying that farmers are depressed and ready to give up on planting. They are assuming they will not be able to plant seeds during the regular planing windows.

“The market does not believe that farmers can complete planting before the window closes,” Phin Ziebell, agribusiness economist at National Australia Bank, said to Reuters. “The weather will now have a material impact on supplies.”

So, the whole harvest is jeopardized and putting grains prices at highs. However, too fast and far jumps are also feeding short traders that saw today’s move in the corn as a selling opportunity.

Grains report June 17

Soybean prices jumped to fresh highs since March 4 on Monday as the bushel was priced at 9.080 earlier in the day. It is currently consolidating levels above 9.000.

Corn rallied to new highs in five years to 4.70 earlier in the day; however, the unit was rejected at that level, and investors started to sell futures contracts. It is now at 4.58.

The same story with Wheat, the grain advanced to fresh highs since August 23, 2018, as it traded as high as 5.53 early in the morning, but the bushel lost ground and it is now trading at 5.44.

Sugar is performing its first negative day in the last five trading sessions as the unit reached highs since April 25 at 0.1270 and it is consolidating levels above 0.1260.

Coffee is extending its rejection from the 200-day moving average at 102.25 as the unit opened the week with losses and it is now testing its 20-day moving average at 90.00. That level is also low since May 29 already tested three times in the last week.

Corn up to 4.70, but down to 4.55

Corn prices are trading on correction mode as the bushel jumped to trade as high as 4.68, highs since June 2014.

Then, short traders saw a selling opportunity in the gap performed on Monday, and they sold futures of corn, sending the unit to trade back at 4.58. However, it remains above Friday’s highs of 4.57.

If the bushel price holds above the 4.57, prices will use that level as a new leg for the next rally, perhaps to 4.70 again and 4.74.

Later on the day, the United States Department of Agriculture will release its report of national crop progress. The market is not expecting good news, but you never know. Until that moment, prices will be moving mostly sideways.