Grains: Soybean, Corn Consolidates Lows, Wheat Extends Drops as USD Rallies

Grains investors focus now on Friday’s employment report. Not for a direct impact from NFP, but as a way to check what Jerry Powell and colleagues will be doing in the next meetings with a strong or weak employment report.
Mauricio Carrillo
The FED

Agricultural futures such as Soybeans, corn, and Wheat reacted down as the Dollar index rallied as a reaction for the rate cut in the Federal Reserve.

The decision to cut interest rates by 25 basis points was in line of expectations, but the Fed’s reluctance to give any hint on future rate cuts fueled the Dollar, which index jumped to levels not traded since May 2017 near to 99.00.

On that framework, grains performed significant losses on Wednesday and are digesting the decline on Thursday in the way of consolidative movements.

Grains investors focus now on Friday’s employment report. Not for a direct impact from NFP, but as a way to check what Jerry Powell and colleagues will be doing in the next meetings with a strong or weak employment report.

A strong NFP would close the door for aggressive rate cuts, giving the Dollar with more stamina to escalate prices, sending grains down.

More rains and hot temperatures

Farmers in the United States are experiencing more rains and Thunderstorms in parts of the U.S. Midwest; however, they are now concerned about too much rain and possible flooding.

On the other hand, southern plains are suffering extreme hot temperatures that are potentially dangerous to crops.

Soybeans consolidate prices at 8.600

Prices of Soybeans daily chart August 1

Soybean is trading sideways on Thursday after posting two days of declines from the 8.900 area. On Wednesday, the unit closed 1.62% negative at 8.598.

Currency, soybeans are trading 0.07% positive at 8.606. Previously, the grain declined to trade as low as 8.580, its minimum since June 12.

Technical conditions remain weak for the oilseed, especially after a strong dollar and the break below the 8.660 critical level.

Also, trade war, temperatures, and Chinese pork problems are not giving resting to the decline.

To the downside, next support lies at 8.500. Then, please watch 8.400 and 8.360 as possible buying zones. On the other side, resistances come at 8.660, 8.700, and 8.900.

Corn find supports below 4.000

Prices of Corn August 1 daily chart

Corn is trading in consolidation mode after posting two days of declines with a deep fall on Wednesday post-Fed decision. The unit lost the 4.100 area quickly, and it is now testing prices below the 4.000 level.

On Thursday, corn found support at 3.960, its lowest level since May 28. It is currently moving 0.50% positive so far on the day at 3.980.

Technical conditions suggest more room for the downside with the 3.900 as the next significant support. Below there, 3.810 and 3.750 are the levels to watch.

To the upside, corn needs a close above the 4.060 area to start believing in more gains.

Wheat negative for the third day

There is no rest for wheat as the unit is extending declines for the third day on Thursday. The grain has broken the 200-day moving average at 4.860, and it is now heading toward the 4.800 area, July 23 lows.

The technical picture is pretty negative for Wheat, and the most natural development is a test of the 4.720 area in the next days.

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