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Grains Sag on Fresh Trade Rhetoric

David Becker
Updated

Grain prices are slightly lower after rebounding on Thursday. Trump continues to generate volatility upping the anti on Thursday with talks of an additional 100-billion in Chinese tariffs. Weekly corn exports were on the rise, and continue to outperform if soybeans do not have a home in China due to a 25% increase in tariffs.

Corn Prices

Weekly corn export sales for the 2017/18 marketing season of 898.3 metric tons, fell 34% from last week and were 50% below the prior 4-week average. New crop sales came in as at 11 TMT, lifting combined sales to 909.3 TMT. Total sales were below analyst expectations that ranged from 1,100 to 1,600 TMT. Increases were reported for South Korea, Mexico, and Taiwan. 2017/18 export commitments are 84% of the USDA forecast and need to average 417 TMT per week to meet projections. Export sales trail last year’s pace by 2%.

Corn prices rebounded sharply into the close on Thursday and closed at a fresh 8-month high. In early north American trade prices are down nearly 1%. Prices bounced near support at the 10-day moving average at 381. Target resistance is seen near the April highs at 3.92. Momentum is neutral as the MACD (moving average convergence divergence) histogram is printing in the red with a flat trajectory which points to consolidation.

Soybean Prices

Soybean prices rebounded near the 100-day moving on Thursday but are down more than 1.7% on Friday. Support is seen near the 100-day moving average at 997. Resistance is seen near the 10-day moving average at 1027. Momentum is negative as the MACD histogram is printing in the red with a down sloping trajectory which points to lower prices.

Wheat Prices

Wheat prices dropped near 0.6% on Friday and continues to form a bear flag pattern which is a pause that refreshes lower. Support is seen near the 10-day moving average at 454 and then the March lows at 441. Resistance is seen near former support at 470, and then the April highs at 463. Momentum is turning positive and the MACD is poised to generate a crossover buy signal.

This article was originally posted on FX Empire

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