DTN Grain Close: New Lows in Winter Wheat
May Chicago and K.C. wheat contracts fell to their lowest closes in 2017, pressured by improving crop conditions and an easing of this year’s drought threat. Corn and soybeans also finished lower Thursday with the anticipation of South America’s competing supplies keeping potential buyers away.
Midday: Wheat leads trade lower at midday.
Corn trade is 2 to 4 cents lower with trade seeing spillover pressure from wheat and a general lack of buying enthusiasm. The weather forecast should allow for mixed planting progress in the near term with Nebraska, Iowa, and Illinois looking drier near term. Ethanol margins are stable this morning with futures edging higher, while corn values fade.
Acreage concerns going forward will limit downside. The weekly export sales were 756,400 metric tons of old crop, and 91,800 of new which was within expectations. On the May chart support is at the $3.54 3-month low with resistance at the $3.66 1/2 100-day moving average.
Soybean trade is flat to 3 cents lower at midday with early gains fading during the day session. Meal is $1 to $2 lower and oil is 15 to 25 points higher. South American harvest is on the back stretch, and trade may look to discourage US soybean acreage with the slow pace of corn planting early on with the spreads widening out in favor of soybeans through midweek. Basis has remained steady this week with softer crush margins.
The weekly export sales were mixed with old crop sales of 211,000 metric tons, 14,000 of new, 135,000 metric tons of old crop meal, 18,100 of new meal, and 33,200 of oil. Support is the 10-day moving average at $9.47, with the multi-month low at $9.29 below that, with resistance the 20-day at $9.54 above that, which we have tested overnight.
Wheat trade has washed out to new lows this morning after flat overnight trade with supply concerns returning to the forefront with short sellers being rewarded again.
The cold threat looks to be fading for this weekend with moisture remaining ok for most of the winter wheat belt, with North Central and North West Kansas inline for better moisture the next week. The Dakotas look wet enough to keep planting slow for now, but plenty of time remains with North Dakota remaining wetter with better South Dakota progress.
The Black Sea area is showing some near term dryness, but concerns remain limited for now, with early estimates of the crop down 7% from last year. The dollar index continues to track below 100 for now.
Weekly export sales were ok at 414,000 metric tons of old crop, and 137,200 of new crop. On the May KC contract support is at the $4.10 life of the contract low made this morning with resistance at the $4.23 20-day moving average.
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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.