DTN Grain Midday: Wheat Leads in Softening Trade
Wheat leads softening trade lower at midday.
Corn trade is 2 to 4 cents lower at midday with early short-covering support giving way during the day session with wheat selling spilling over. Ethanol margins are under a little pressure to start the week, but spring use should be supportive. Corn basis is expected to remain steady with the weekly export inspections remaining strong at 1.333 million metric tons, along with 132,000 metric tons of corn announced as sold to South Korea.
South America does not have any major weather issues for corn in the near-term picture with early double-crop corn progress good. Trade has moderated the oversold conditions with the light bounce the past three sessions, but due to the market being below all major moving averages, we still need to view the chart picture as negative.
On the May chart, nearby support is at the $3.66 10-day moving average, which we are just below at midday, then the $3.52 late December low. Resistance is the 200-day at 3.69 1/2.
Soybean trade is 2 to 5 cents higher at midday with trade working to consolidate support over the $10.00 area with harvest continuing in South America. Meal is flat to 1.00 lower, and oil is 25 to 35 points higher. South America looks to continue normal progress in the near term with any weather issues limited.
Crush margins will need to improve to drive basis improvement as the export program slows seasonally with weekly inspections holding up ok at 737,255 metric tons. The strength in the real has supported U.S. export competitiveness.
On the May soybean chart, support is at the $9.92 low printed on Tuesday, resistance is at the 10-day and lowest major moving average at $10.07.
Wheat trade is flat to 7 cents lower at midday with forecast rains overcoming support from the current warm dry weather on the Southern Plains. Wetter weather remains in the extended forecast but will need to materialize soon to limit stress. The dollar remains just above the 100 level on the index. Minneapolis wheat has gained vs. the winter wheats during the day session.
The weekly export inspections were stronger at 624,334 metric tons. On the May KC contract, support we are back above the 100-day at $4.43, with resistance the 200-day at $4.56.
The U.S. stock market indices are mixed with the Dow futures up 20 points. The interest rate products are higher. The dollar index is 3 points lower. Energies are lower with crude down $0.60. Livestock trade is mixed. Precious metals are mixed with gold up $1.50.
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The bulls were again winners in an exciting week for longs and producers. In last week’s report, I said the markets bias would be near unchanged to a bit lower.