Turnaround Day for Grains, Soybeans, Corn and Wheat Post Recoveries

After two days of decline, major grains are posting some recoveries on Wednesday as investors are digesting news about heat temperature in the United States, Russia soybean sales to China, and good news on Germany wheat crop.
Mauricio Carrillo
Turnaround Day For Grains, Soybeans, Corn and Wheat Post recoveries
Turnaround Day For Grains, Soybeans, Corn and Wheat Post recoveries

It seems that agricultural futures investors are retaking positions on Wednesday after the two-day sell-off on grains. Hot temperatures are now concerning farmers.

After two days of decline, major grains are posting some recoveries on Wednesday as investors are digesting news about heat temperature in the United States, Russia soybean sales to China, and good news on Germany wheat crop.

Russia expands soybean sales to China

Russia’s Rusagro is exporting its first bulk vessel of soybean to china with 4.4 thousand tonnes. The company also announced it intends to increase exports of agricultural products to the Asian country.

According to the press release, “considering changing of traditional trade flows, China may become an important export destination for Russian agricultural products.”

Germany wheat and corn survives heatwave

Despite the heatwave Germany experienced in the last weeks, wheat and corn crops are set to rise in the 2019 harvest campaign according to the Germany association of farm cooperatives.

Wheat will rise 17.7% in 2019 to 23.85 million tonnes, slightly below previous expectations in June, but a significant increase from 2018. Corn will be 23.8% up from last year to 4.13 million tonnes.

Heat temperature to impact late-planted crops

The US National Weather System is alerting farmers about a dangerous heat wave now affecting two-thirds of the US. High temperatures would affect late-planted crops and then putting grains supply on problems.

Soybeans hold above the 8.800 area, for now

Soybean price chart daily July 17

Prices of soybeans are testing the 8.800 area on Wednesday in a matter of recovery following two days of significant declines. Currently, it is trading at 8.830, 0.15% positive on the day.

Soybeans are attempting to recover ground following news of heatwave in the United States and Europe, and Russian sales to China.

However, the upside seems limited in the Soybean chart. Technical conditions suggest more room for the downside with the unit contained by the 20-day moving average at 8.895.

Supports are at the 200-day moving average at 8.770, then the 50 days MA at 8.610, and the 8.400, June 10 low.

Wheat finds support at 5.000

Wheat daily chart July 17

Prices of wheat are fighting to maintain the unit positive on the day as it found support at 5.000, but the recovery was capped at 5.100. Currently, wheat is trading at 5.030, 0.05% positive on the day.

Wheat is trading in consolidation mode after two days of declines from the 5.300 area. Earlier in the day, hot temperature news lifted prices and pushed up. However, the downside pressure is intense.

Technical indicators suggest more room for drops in the short term with the 4.950 as the first support. Below there, the 200-day moving average at 4.870 is the level to watch.

Corn recovers ground after two negative day

Corn daily prices July 17

After two negative days from 4.530, corn is trading positive on Wednesday as investors found buying interest at 4.230 on Tuesday and the unit extended the recovery to 4.350.

Currently, corn is trading at 4.325, 0.70% positive on the week. The chart pattern suggests more room for the upside; however, momentum is not strong, and technical indicators are showing exhaustion.

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