Grains Prices Slump as Momentum Turns Negative
Grain prices are lower in early North American trade. Prices are testing support as export sales rise. Tariff issues remain as the Trump Administration levied trade Steel and Aluminum tariffs on Europe, Canada and Mexico which could eventually experience retaliation on farm products.
Corn Prices
Corn prices moved lower and are poised to test target support near an upward sloping trend line that comes in near 3.37. Resistance is seen near the 10-day moving average at 3.99. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.
Weekly corn export sales for the 2017/18 marketing season of 993.1 TMT were up 16% from last week and 12% more than the prior 4-week average. New crop sales of 270.9 TMT lifted combined sales to 1,142.4 TMT. Total sales were within analyst expectations that ranged from 850 to 1,350 TMT. Increases were reported for Columbia, Mexico, and Japan. 2017/18 export commitments are 96% of the USDA forecast and need to average 147 TMT per week to meet projections. Export sales are up 3% from last year’s pace.
Soybean Prices
Soybean prices are down by approximately 1% in early North American trade but remain rangebound. Resistance is seen near the 10-day moving average at 1027. Support is seen near an upward sloping trend line that comes in near 995. Momentum is neutral as the MACD (moving average convergence divergence) histogram is printing in the black with a flattening trajectory which points to consolidation.
Wheat Prices
Wheat prices are down in early North American Trade. Resistance is seen near the 10-day moving average at 525. Support is seen near and upward sloping trend line at 5.05. Momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in the red with a downward sloping trajectory which points to lower prices.
Wheat export sales for the 2017/18 marketing year came in at 29,500 metric tons, down 74% from last week and the 4-week average. New crop sales totaled 270.9 TMT, lifting total sales to 300.4 TMT. Combined sales were down 34% week over week but within analyst expectations that ranged from 50 to 550 TMT. Export commitments are 96% of the USDA forecast with 1 week to go. Export sales are 16% below last year’s commitments during the same time frame. Major purchases were made by South Korea, Viet Nam, and Spain.
This article was originally posted on FX Empire
