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Corn Breaks Out to Fresh 2-year Highs Wheat and Soybeans Follow

David Becker
Updated

Grain prices surged are higher in early North American trade as private exporters sold 140,000 metric tons of corn from optional origins to Saudi Arabia for this year and next. Daily sales of corn have slowed recently, and global buyers’ return to the market is boosting prices. Traders are also digesting rumors that China could start buying more American soybeans as trade relations between the two countries improve.

Corn Prices

Corn prices broke out and hit fresh 2-year highs. Target resistance near the June 2016 highs at 4.39. Support is seen near the 10-day moving average at 4.0. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The relative strength index moved higher with price action reflecting accelerating positive momentum and is fast approaching the overbought trigger level of 70.

Soybean Prices

Soybean prices are up more than 1% in early North American trade, breaking through trend line resistance that is now support near 1040. Resistance is seen near a downward sloping trend line at 1065. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

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Demand for soybeans remains robust. The USDA is expecting to grow the crush by 4.68% to a new record of 1.990 billion bushels. The 2016/17 crush totaled 1.901 billion bushels. Through April, NOPA crush members have crushed 5.68% more soybeans than last season. This is currently ahead of USDA projections.

Wheat Prices

Wheat prices broke out above trend line resistance which is now support near 5.40 in North American trade. Resistance is seen near the July highs at 553.. Momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

This article was originally posted on FX Empire

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