Grains Trade Negative on Friday Amid Profit Taking

Soybeans, Corn and Wheat are trading down on Friday amid news on Mexico possible trade war and profit taking ahead of the end of the month.
Mauricio Carrillo
Grains Trade Negative on Friday Amid Profit Taking

Soybeans, corn, and wheat among other agricultural commodities are trading negative on Friday. Investors are digesting latest news on China purchases stop, Mexico new punishment tariff from the White House and the end of the month.

Investors are closing positions ahead of the end of the month as they prefer to cash in gains. Most grains are posting monthly gains for the first time in several months.

Soybean prices are trading in consolidation mode around 8.800 as investors are taking profits on the last day of the month. The grain is ready to close its first positive month since January.

Corn has been rejected by the 4.300 area again, and it is now trading around 4.180. The move is caused by a mix of short interest at 4.300 and a profit-taking move on the last day of the month. Corn just imploded on May with a 19% monthly gain that brought the unit above 4.000 for the first time in a year.

Wheat is trading negative on Friday as investors are closing positions ahead of the end of the month. The price of wheat is trading below the 5.000 level again.

Trump’s to punish Mexico with tariffs due to illegal immigration

As reported earlier, US president Donald Trump announced that the White House would impose a new 5% tariff to Mexico starting June 10 and it will be gradually increased to 25% until Mexico acts to stop illegal immigration into the US.

“The news took many experts by surprise, but it is in line with Trump’s behavior. The announcement opened the door for concerns about how Trump will use tariffs as a war weapon not only against countries with a preferred economic framework but also for political reasons or personal opinions.”

So, Not only stocks or metals but also agricultural commodity investors are concerned about how a new front of the trade war will affect the already poor condition of United States farmers.

Soybeans on consolidation pattern above 200-day moving average

Soybeans Daily chart May 31

Prices of soybean are falling on Friday as investors are digesting the news and closing positions ahead of the end of the month. They prefer to cash any possible profit and take it into the books amid the uncertainty around the markets.

Currently, soybean is trading 0.45% negative at 8.740, but the move can be considered as a consolidative behavior as it remains close to recent highs.

The grain is moving inside a small range between the 200-day moving average at 8.700 and the 8.800 resistance — all just below May 29 highs at 8.826.

If the oilseed manages to extend gains above the 8.826, it will find next resistance at 8.870 and 8.970.

Wheat falls below 5.000 again amid profit taking

Wheat daily chart May 31

As the end of the month came, so investors want to close positions to book profits. That is happening right now with wheat as the unit was unable to extend gains beyond 5.100 and it is currently trading down below the 5.000 area.

Wheat is currently trading 1.77% negative in the day at 4.980 in a move that seems a consolidation and profit taking event. Technical indicators suggest sideways in the short term but gains in the bigger timeframe.

Corn rejected at 4.300 again

Corn daily chart May 31

Corn is trading 2.40% negative on Friday as investors were unable to push the grain above the 4.300 area. The unit got a rejection that sent the unit to the current 4.175.

The unit is now overbought and it needs to take a breath before attempting new highs. On the monthly chart, corn is closing May with a 19% gain that brought the pair above 4.000 for the first time since May 2018, and to 4.295, the highest level since June 2016.

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