Yahoo Finance Daily Grains Analysis for February 12, 2018
Grain prices gained some traction on Monday following reports on Friday from the CFTC that said that hedge funds slashed their bets that soybean prices and corn. The CFTC reported that money managers cut their net short position in soybean futures and options by over 50% to a little under 10,000 contracts as of Tuesday February 6, 2018. They made similar moves in corn markets, cutting their net corn short by over a third and their wheat short by 14%. Concerns about dry weather in Argentina and the southern Plains helped spark the change, though a recent USDA report suggested to some that ample domestic supplies of wheat and soybeans would continue to weigh on prices.
Corn Prices
China’s corn imports are expected to be higher this season due to a rising pip population and a reduction in sorghum following the government’s decision to investigate imports, says the China Ministry of Agriculture. It now expects China to import 1.5 million tons of corn, 25% more than previously forecasted.
Corn prices are higher and a grinding upward. Support is seen near the 10-day moving average at 3.625 per bushel. The first level of target resistance is seen near the August highs at 3.75 per bushel. Additional resistance is seen near the 2017 highs at 3.94. Momentum is accelerating higher as the MACD (moving average convergence divergence) histogram prints in the black with an upward sloping trajectory which points to higher prices. The MACD also just generated a crossover buy signal.
Soybean Prices
Soybean prices gapped higher on robust short covering. Support on soybeans is seen near the February lows at 987. Resistance is seen near the downward sloping trend line at 1008. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints near the zero-index level with a flat trajectory which points to consolidation. The RSI (relative strength index) is moving higher with price action reflecting accelerating positive momentum.
Wheat Prices
Wheat prices moved higher early trade Monday. Prices are forming a triangle pattern as energy is stored weighing for a breaking out. Short-term support is seen near the 10-day moving average 4.515, and then an update sloping trend line at 4.48. Resistance is seen near a downward sloping trend line that comes in near 4.62. Momentum is neutral as the MACD (moving average convergence divergence) histogram prints near the zero-index level with a flat trajectory which points to consolidation. The RSI (relative strength index) is moving sideways which reflects consolidation as it prints a reading of 61 which is in the middle of the neutral range.
This article was originally posted on FX Empire
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