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Hard Weather Conditions Push Corn and Wheat to Multi-Month Highs

Mauricio Carrillo

Corn and wheat are rallying on Tuesday as investors are digesting news about hard weather conditions that are delaying planting as well as drought in South American. Speculations about a shortage in the production of those grains.

Soybeans are trading positive for the second day as the pair finally broke above the 20-day moving average. Sugar trades down on Tuesday as the commodity is testing the 0.1120, lows since October 2018 reached on May 17.

Wheat prices jump to 4.848, highest in three months

Wheat daily chart May 21

Wheat is trading higher on Tuesday as investors are digesting news that waterlogged ground in the United States will cause the slowest planting season on record.

The US Department of Agriculture reported in its Crop Progress report that spring wheat planted in six states stood at 70%, well below the 80% of average in the last five years by this time.

Wheat is rallying for the sixth day in the last seven as the delay in planting is causing speculation of a shortage in production.

Today, wheat is 1.74% positive on the day as it is trading at 4.799. Previously, the grain traded as high as 4.848, just below the 200-day moving average at 4.871, level which is acting now as resistance.

Since the start of speculations on May 13, wheat has gained around 18% in value from 4.110 traded on the mentioned May 13 to today’s highs at 4.848.

If the unit breaks above the 4.871, it will find resistance at 4.900 and the psychological 5.000 level.

To the downside, former resistance 4.7200 is now working as support, and any retracement that holds this level will be identified as consolidation before the next upside leg.

Corn jumps to 3.900, highest in one year

Corn daily chart May 21

Maize is rallying again on Tuesday as investors are digesting weather problems and delays in planting as a reason for higher prices. Corn prices jumped to 3.900, its highest level since June 1, 2018.

The rally comes as a reaction from the US Department of Agriculture that reported that just 49% of maize had been planted right now, well below the average of 80% in the last five years and of 78% planted by this time of 2018.

As reported yesterday, the grain broke above the 3.751 level and headed to 3.850 previous a brief consolidation time around 3.800. On Tuesday, Corn is trading 2.06% positive on the day at 3.872.

Technical conditions suggest corn to continue rising in the next days. The unit needs a close above 3.870, above that, check 3.970 and the psychological 4.000 level as resistance.

Soybeans break above the 20-day moving average

Soybean prices finally broke the 20-day moving average level that was acting as resistance for a week. The unit is now testing May 15 highs at 8.355.

The planting situation of soybeans is not too different from corn and wheat, but the excess of demand that soybeans are experiencing in the last years is keeping prices low.

Soybean prices are now trading at 8.278, 0.98% positive on the day. If the unit breaks above the mentioned 8.355, it will head to 8.500, November 26 low that is now acting as resistance. Above, soybean will face the 200-day moving average at 8.709.

This article was originally posted on FX Empire