Grains Recovers But it Looks Short-Lived, All Eyes Now on WASDE Report

Investors are digesting recent news on political, social and economic conditions. The recovery looks to be short-lived and everything will be decided next Monday with the WASDE report.
Mauricio Carrillo
Grains Recovers But it Looks Short-Lived, All Eyes Now on WASDE Report
Grains Recovers But it Looks Short-Lived, All Eyes Now on WASDE Report

Agricultural futures such as soybeans, corn, and wheat are trading on recovery mode on Thursday as conditions are improving overall in markets. However, trade war, weather conditions, and migration issues in the U.S. are concerning investors.

Besides, the market is also focused on the World Agricultural Supply and Demand Estimates (WASDE) report that will be released on Monday. Experts anticipate soybean acreage of around 81 million acres, with a yield of 47.6 bushels per acre. Previously, the USDA expected 80 million acres, with 48.5 bushels per acre.

On the other hand, strong to severe thunderstorms are expected again in the Midwest, including eastern Kansas, Missouri, Great Lakes, Ohio Valley, and Arkansas. More in the south, expectations of hot temperatures are expected in states including Texas, Louisiana and again Arkansas.

Finally, 680 workers were arrested by U.S. immigration agents on Wednesday in farmer plants in Mississippi for being working illegally. The most massive worksite enforcement operation in a single state.

This operation is also adding concerns to grains investors as immigrants are a source of cheap workforce in the already poor farmer current conditions. If farmers don’t find new workers, they will lose harvesting options; also, if they find regulated operators, they will pay more.

Soybean positive for the second day

Futures of Soybean August 8 daily chart

Soybean futures are trading positive on Thursday as investors are digesting news about the trade war, severe weather conditions, and immigrant-related problems in the last days.

The unit is logging its second day of gains; however, the advance is limited as the oilseed is moving in a range between 8.50 and 8.60 the bushel. Currently, it is pricing at 8.58, 0.53% positive on the day.

Technical conditions suggest a potential revival for soybeans prices, however, the fundamental factors are containing any possible upside. Yet, the 8.40 level looks like the price which is attracting the grain.

To the downside, after the mentioned 8.40 level, soybeans would see new supports at 8.30, and then 8.16 per bushel. Below there, the 7.90 would be the critical last frontier.

Corn tests the 4.10 level

Futures of Corn Daily chart August 8

After posting gains for the second straight day, corn is now testing the 4.10 resistance for the first time in August. The unit is taking the 4.00 area as the level which is supporting a new bullish leg in the short term.

Currently, Corn futures are trading at 4.09 per bushel, an increase of 0.62% so far today. Technical indicators suggest more room for the upside with the mentioned 4.10 as the immediate resistance. Above there, check 4.14, 4.35, and the 4.40 area as next resistances.

To the downside, a break of the short term support at 4.00 would open the doors to a retest of the 3.87 area, August 1 low.

Wheat extends recovery from 4.77

Futures of Wheat Daily chart August 8

Prices of wheat are trading positive for the second day in a row as the unit is extending its bounce from the 4.77 area performed on Wednesday. On Thursday, wheat is testing levels above the 4.90 level and heading to the short term resistance at 4.95.

Currently, the unit is pricing at 4.91, 0.72% positive in the day. Technical conditions are combining positive and negative readings, but the chart pattern suggests that the recovery will be short-lived as much as the 5.10 level remains intact.

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