March soybeans took back 10 1/2 cents of this week’s losses on Friday, helped by a slightly smaller crop estimate from USDA. Friday’s reports weren’t as kind to corn and wheat prices with March Chicago wheat dropping 12 3/4 cents and ignoring a new three-year low in the U.S. dollar.
Midday: Trade is flat to lower ahead of the USDA WASDE, Stocks and Production numbers.
Corn trade is narrowly mixed with sideways trade ahead of the report coming at 11. Ethanol margins are fairly stable with the blender margins leading the way. The USDA announced 320,000 metric tons sold on the daily wire to unknown. Corn basis and carry remains fairly steady with carry decreasing in the cash market vs. the futures market in many areas.
Cold weather will likely slow ethanol output in the near term. Livestock efficiency should struggle with the very cold spells and changing weather that is okay for feed demand in the bigger picture.
Looking ahead to the January World Agricultural Supply and Demand Estimates (WASDE) as well as the Quarterly Grain Stocks report: the average guess is for production to be at 14.557 billion bushels with a carryout at 2.414 billion, and Dec. 1 stocks at 12.143 billion. Slightly lower than the past estimates, but no major change.
The 2017 US Corn yield is expected to be at 175.2 bpa versus 175.4 on the November report. The world carryover is expected to be down around 1 million tons from the 204.1 million metric ton December USDA number.
On the March chart support is the $3.46 1/2 contract low. Resistance is at the 20-day moving average at 3.50 1/4 then the 50-day at $3.54.
Soybean trade is 3 to 5 cents lower making new lows ahead of the report in fairly quiet action, staying on the lows ahead of the report. Meal is $2 to $3 lower and oil is narrowly mixed. South American weather is keeping the same basic forecast coming forward with mixed weather in Argentina and Brazil. Basis and carry remains mostly sideways.
The USDA report is expected to come in at 4.427 billion production, stocks at 3.181 billion bushels, and carryout at 472 million bushels. On the March, support is the new low at $9.45 scored this morning, and resistance the 10-day at $9.63.
Wheat trade is narrowly mixed at midday with trade staying just below the next resistance level ahead of the report. The current shot of cold area shouldn’t be as threatening but the Plains remain dry, while Russia has been warmer than normal, with minimal snow cover in case of a cold stretch.
The dollar fallen down to 91 on the index with the general trend remaining down. Report expectations are for wheat stocks at 1.849 billion bushels, and carryout at 959 million bushels, and planted acres of 31.307 million acres of winter wheat.
On the March Kansas City contract, chart support is the 10-day at $4.34, with the 100-day at $4.43 as the next level of resistance, which we touched this morning.