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Grains Extends Losses as Trade Talks Ended Fast, New meeting in September

Currently, prices of soybean are moving at 8.710, posting 0.33% daily losses. The technical picture remains pretty negative, but a brief period of consolidation is expected ahead of the FOMC meeting.
Mauricio Carrillo
Grains Extends Losses as Trade Talks Ended Fast, New meeting on September
Grains Extends Losses as Trade Talks Ended Fast, New meeting on September

Agricultural futures are trading lower on Wednesday as investors are digesting the abrupt end of the well-announced talks between China and the United States.

The conversations will continue in September with a new meeting between White House officials and Beijing trade representatives.

As for this week meeting, talks focused on Chinese purchases of American farm products and the base for the new round of negotiations.

Indian weather forecast improves

Reuters reported that weather forecast in India is improving after Monsoon rains in the coming weeks are expected to increase its volume after two weeks of a shortfall.

The announcement made by K.J. Ramesh, director general of the India Meteorological Department, boosted prospects of the agricultural sector. “We are going to see some rapid recovery in the monsoon and the rainfall shortage is expected to come down sharply in the next couple of days.”

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Soybeans down for the second day

Price of Soybean daily chart July 31

After a three-day consolidation phase near to 8.780, soybean prices finally broke below the 200-day moving average on Tuesday and today, it is extending losses to trade at its lowest level since July 9 at 8.685.

Currently, prices of soybean are moving at 8.710, posting 0.33% daily losses. The technical picture remains pretty negative, but a brief period of consolidation is expected ahead of the FOMC meeting.

Then, be aware of end-month profit taking and rebalancing.

To the downside, soybean will face support at July 9 low at 8.660, then June 10 minimum at 8.410 and the 8.100 area.

To the upside, the unit needs a close above the 8.900 area before start believing in a robust recovery. Watch resistances at 8.900, 9.00 and the multi-month frontier at 9.150.

Wheat loses its mojo

Daily chart Wheat July 31

The wheat recovery from 4.800 looks ended for sure as the unit was rejected by the 5.040 area twice this week. Then, the grain started trading down and today it is posting a 1.50% decline for the second day.

Wheat is currently testing the 200-day moving average at 4.860. Below there, the unit will re-test the mentioned July 23 low at 4.800.

The technical picture is changing right now, and it is suggesting more declines in the short term with 4.600 as the more natural destination.

To the upside, wheat needs to clear up the 5.040 area. Then, look for 5.300 and 5.500 areas as the frontier.

Corn extends decline and trades at lows since June 6

Price Corn daily chart July 31

After two days of declines, the fifth out of the last six, corn is extending drops again on Wednesday with the unit breaking below the 4.060 and testing minimums since June 6 at 4,010.

Currently, corn is trading at 4.012, 1.25% down in the day. Technical picture remains depressed with indicators suggesting more losses in the short and middle term. Supports are at the psychological 4.000 area, 3.900, and the 3.750.

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