Grains Lose Steam and Extend Declines

Grains are trading down on Tuesday as investors are digesting deteriorating crop conditions and lower yield in the acreage. However, the market is still confident from the WASDE report published last week.

53% of the Soybean crop was rated good or excellent according to the USDA report published on Sunday. It is down from the 54% announced the previous week.

Corn crop was rated 56% good or excellent, 1% down from the previous week. Spring wheat was rated 70% good or excellent, up from 69% the previous week.

Soybean positive but losing ground

Soybeans are fighting to maintain early gains as the unit rose to trade as high as 8.74 on Tuesday, but it was unable to maintain levels, and it retraced to current levels around opening price.

At the moment of writing, futures of soybean are trading at 8.70, 0.45% daily gains. Technical conditions are mixed but slightly pointing to the upside. The bull case is also backed by deteriorating crop conditions in the United States.

To the upside, soybean will find resistance at 8.80, above there, 8.85, August 13 high, and then the psychological 9.00 per bushel area.

To the downside, the pair seems sustained by the 8.55 area, where the minimums of August 15 and 16 are. Below there, please check for the 8.50 level, and then the 8.44 critical support.

Corn rejects the 3.80 area

After jumping to the 3.80 level, futures of corn weren’t able to sustain gains, and the unit got a rejection that sent it to test the 0.70 area. The pair is almost at the same price where the previous week closed.

In this way, corn is finishing its recovery from August 14 and 15 lows at 3.58. Technical support are mixed, but the downside is more favored.

Immediate resistance is at 3.70, followed by the 3.60 and 3.58 area. Below there, 3.50 and May 13 low at 3.43 are the frontiers.

Wheat extends declines from 4.77

Wheat is extending its rejection of the 4.77 area performed on Monday and it is now breaking below the 4.65 level and reaching prices not seen since May 17.

Currently, wheat is trading at 4.64, 1.64% down in the day. Technical conditions suggest that the downside is far from ending and the next supports are likely to be 4.50, 4.30 and the May 13 low of 2.18.