What Grain Bulls Need Now as They Fight to Keep Price Trends Alive

March corn (ZCH26) futures last week saw a meager gain of 1 1/2 cents. However, last Friday’s technically bullish weekly high close suggested some follow-through price strength when trading resumes after a three-day U.S. holiday weekend. March soybeans (ZSH26) on the week were up 17 3/4 cents. March soybean meal (ZMH26) on Friday closed at a two-month high and for the week rose $5.60. March bean oil (ZLH26) futures last week gained 175 points. March soft red winter wheat (ZWH26) for the week was up 19 cents. March hard red winter wheat (KEH26) gained 11 1/4 cents for the week.

USDA’s 100 million-bu. increase to U.S. corn exports in its February supply and demand report early last week halted selling pressure in futures.

However, the corn futures market’s response to the record U.S. export demand was only tepid. Hefty domestic supplies, a corrective pullback in crude oil, and technical resistance levels above current prices have all crimped buyer interest recently.

Corn futures traders remain focused on second safrinha corn planting in Brazil, with the ideal planting window closing in rapidly. As springtime comes into view, grain trader focus will shift from South American weather to U.S. weather. The USDA’s late-March Prospective Plantings Report and its results will also be a next major market driver.

The soybean futures market on Friday saw some mild corrective selling and profit taking from the shorter-term futures traders, but the bulls had a very good week, overall. Importantly, soybean meal futures posting a technically bullish weekly high close last Friday gives the soybean and meal bulls better momentum when trader resumes this week, after the three-day holiday weekend. Soybean complex traders will also keep a closer eye on the wheat futures markets this week, given their recent price rallies.

China-U.S. trade relations appear to be on the upswing, which is price-friendly for the soy complex futures. President Donald Trump last week said he will meet in person with Chinese President Xi Jinping in April — possibly to extend the present U.S.-China trade truce. Soybean bulls are hoping better U.S.-China relations will translate into more Chinese purchases of U.S. soybeans in the coming months.