Corn continues to trade within a 7-month consolidation, but we expect it to break out to the upside sooner than later. The fundamentals seem to have the “story” for a push higher because of strong export tone and the lack of incentive for farmers to plant more acres in 2019/2020 season. China has revised both their production and consumption estimates. China is pledging to purchase a “substantial” amount of agricultural products and that may be exactly what corn needs to move higher with potential corn, ethanol and DDG exports to China. March corn has traded a pretty large range since June with the middle of this range being 376.75. Resistance comes in around 382 and needs a close above this level to expect a longer term resumption of the uptrend.
In the beans market, the massive outlook on ending stocks for this year and next is looming on the markets right now. The sell-off in beans overnight was sparked by bearish outside markets as well as bearish macro-economic concerns. China’s imports for December were down 40% from last year, which is somewhat expected, although this is the lowest since 2011. Supply is the “major” factor holding the market down. Supply is ample now, and expects to stay this way in the short term, despite China buying beans. A close below 903 and even more so 898 will sour the charts for March soybeans and should push lower if broken. 917 is resistance today.
When it comes to wheat, dry areas in North Africa are dry enough to potentially boost world trade. If outside market forces support, wheat should have the legs to break out of this 3 month consolidation. Global prices are creeping higher and it should not take much weather issues to spark potential significant buying. Support comes in at 515 and 512 with resistance at 524.
Corn Mar ’19 Daily Chart
Soybeans Mar ’19 daily Chart
Wheat Mar ’19 Daily Chart