The three Kings of Commodities (gold, crude oil, and corn) posted gains Wednesday while both the Dow Jones Industrial Average and U.S. dollar both took beatings. Gold was the most impressive commodity, gaining $23 as the U.S. dollar index fell 0.66. Most commodity sectors rallied, including an impressive move by coffee. Soybeans struggled to find buying interest seen early in the week.
Midday: Trade is higher at midday, led by wheat.
Corn trade is 2 to 4 cents higher at midday with positive action during the day session due to a wetter forecast and positive demand news. The weekly ethanol production report showed production 2.09% higher, and stocks 1.56% higher, while gasoline demand was 0.47% lower, with ethanol futures lower in the wake of the report.
There have been some rains in the double-crop corn areas of Brazil in recent days with pollination ongoing, with some areas still on the dry side. U.S. weather looks to remain wet for much of the Western Corn Belt, which the market sees as mixed with some planting being affected but moisture good for the crop in the ground.
Basis has remained steady to firm in the recent days. The July chart support is the $3.60 3/4 four-month low. Resistance was at the 20-day moving average at $3.69, which we have edged above at midday, so notable nearby resistance is the 100-day and highest major moving average the 100-day at $3.74.
Soybean trade is 1 to 3 cents higher at midday with trade continuing to edge higher into midweek with good demand as the July/August contracts move to a small inverse. Meal is flat to $1 lower and oil is 25 to 35 points higher. South American export competition should remain strong seasonally.
Currency trade is having more of an impact on Brazilian farmer decisions. There is talk of Brazilian farmers holding and storing more beans, but with such a big crop, it should not affect available supplies near term.
U.S. basis remains fairly steady with better export shipments, but weaker crush. July beans are back above the 50-day at $9.76 with the 10-day at $9.70 below that. The one-month low at $9.52 and high at $9.89 is the July major support and resistance levels respectively.
Wheat trade is 2 to 9 cents higher at midday with short-covering after the weakness to start the week with U.S. export competitiveness much improved going to the Mediterranean on the tenders today with the dollar making new lows again. Weather looks to remain wet for much of the winter wheat belt, potentially enhancing disease concerns, while some of the damaged wheat tries to stand back up. There has been some hail damage in the western belt from the recent storms.
On the July KC contract, support is at the recent low of $4.20, with major support at the $4.11 contract low printed a month ago. The 20-day at 4.37 is chart resistance.