Jump to content

Corn, Soybean and Wheat drop into support as yield concerns drive resurgence


Recommended Posts

Agricultural commodities show signs of potential strength as lower yields bring potential for further upside

bg_corn_crop_harvest_377303410.jpgSource: Bloomberg
 Joshua Mahony | Senior Market Analyst, London | Publication date: Friday 02 September 2022 

Agricultural commodity prices have been on the rise of late with the likes of Soybeans, wheat and corn showing the potential of a bullish reversal after periods of weakness. Understandable concerns around demand in the face of global recessionary pressures have driven prices lower, yet the resurgent we are seeing serves to highlight the repercussions of a particularly hot summer in the Northern Hemisphere. Subsequent questions around potential shortfalls in yield do provide the basis for supply demand questions that could benefit these markets. Meanwhile, elevated natural gas prices have also served to drive up the cost of fertiliser, similarly raising questions around the ability to achieve comparable yields against previous years. The latest comments from the US Department of Agriculture stated that "US feed grain production in 2022 is forecast to be 6.3 million tons lower this month, reflecting lower yields in corn, sorghum, and barley. US corn production is lowered 146 million bushels on a 1.6 bushel per acre yield drop to 175.4 bushels." This clearly has the potential to raise prices, although there is some speculation that such a move could lead to lower demand from China. Thankfully Chinese Corn demand hit a record hit in 2021, so they are at relatively elevated levels nonetheless.
From a charting perspective, there is a chance that the recent weakness provides a buying opportunity as we see signs of a potential bottoming out over the past month. As such, let's take a look at these markets with a view to understanding the potential for further upside.

Corn looks to have bottomed out over the course of the past two-months, with price starting to turn higher from a confluence of the 50-SMA and 76.4% Fibonacci support. With price steadily creating higher lows over the course of the past six-weeks, this latest pullback looks to have provided us with a fresh buying opportunity here.

C-4-hours-2022_09_02-12h35.pngSource: ProRealTime

Soybean prices have similarly been gaining ground over the course of the past month, with the recent pullback taking us into trendline support. While we could see that bullish trend negated with a break below $13.79, it makes sense to expect a continuation of the trend until such a move takes place.

S-4-hours-2022_09_02-12h43.pngSource: ProRealTime

Wheat prices have managed to push up towards the $8.55 resistance level, raising hopes of a bottom taking shape. However, it is notable that we are yet to see that level break, raising the risk that price simply remains within the $7.62-8.55 range seen over the course of the past two-months. Nonetheless, with price at the 76.4% Fibonacci support level, this is an interesting region of support that should help inform us over where we go from here. Ultimately, we would need to see $8.55 broken to bring greater confidence that price has bottomed out in a similar manner to Soybeans and Corn.

W-4-hours-2022_09_02-12h53.pngSource: ProRealTime
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • With the CryptoSpace evolving everydayy, a plethora of ways also trump up for users to earn and have fun alongside. Some of these events are my favourites. I have participated in a couple of them and the potential to earn therefrom is immense.  Just recently, I came across an event on Bitget for its users to earn passively as well as an opportunity to spin the wheel to win an all expense tour to Santorini island. The criteria for participating in this is relatively simple, you just need to make a net deposit of over 100 USDT and maintain the amount for a day. Depositing greater sums like $500 USDT, 1000 USDT and 1 BTC can further your chances of winning. The more tasks completed, the more spins a participant may have. The event is exclusively restricted to users from the; United Kingdom, Canada, Australia/DACH, French, Italian, Netherlands, Sweden and Poland region. The total prize pool is $50,000 based on FCFS serve basis. This sounds too good to look away from.
    • Still the silence is deafening in here. When will this happen?  it have moved most my Trading Capital to another broker who does support Trading veiw Does the deal with Tastytrade have something to do with this lack of progress?  
    • Well to me I feel that the  crypto market values transparency and reliable services. And Bitget has embraced this approach, attracting a large following,gaining up to 1.4million twitter followers,. Recent data shows significant growth in trading volume, solidifying its position in the market.  The exchanges  focus on user protection and satisfaction has fostered a loyal community. As the platform continues to evolve, its value may continue to grow. What are your thoughts on the importance of value in crypto, and what do you see as Bitget's future potential?
  • Create New...