May K.C. wheat climbed 21 1/4 cents Thursday to its highest close in seven months as winter wheat contracts continue to respond to concerns of dry weather and wildfire risk in the southwestern U.S. Plains. Corn and soybeans also posted decent gains with ongoing support from dry conditions in Argentina.
Midday: Wheat leads firmer trade across the board at midday.
Corn trade is 2 cents higher at midday with the trade just below the 6-month highs reached on Wednesday. December has traded to a new high for the move up to $4.04. Ethanol margins remain positive with some narrowing as the energy complex pulls back from the recent highs with ethanol futures slightly higher this morning. US export corn values should remain pretty competitive with the daily wire remaining active this week, and weekly sales strong again at 1.75 million metric tons.
Double crop areas in Brazil look to build some moisture in the coming days, but that is slowing planting progress. Argentine weather remains tough which remains one of the most talked about subjects preventing selling.
On the May chart support is at the 200-day at $3.80 1/2 that we were able to close above Wednesday. Resistance is now tough to point to, other than around $3.90 or $4 if short covering becomes more active. This could be a wild end to the week.
Soybean trade is 5 to 8 cents higher at midday with trade putting in new highs in volatile two-sided trade as the export market is start to perk up while crush margins narrow. Meal is flat to $1 lower and oil is flat to 10 points lower. The weather pattern looks to keep Argentina dry, and Brazil wet in the near term with pod fill approaching for Argentina, and early harvest ongoing for Brazil, with near term potential for Argentina looking a little lighter again.
Crush margins are at near record levels as we see crush capacity get maxed out domestically, with meal values showing some weakness as we approach $400 a ton. Weekly sales improved at 857,900 metric tons of old crop, 122,100 of new, 139,000 of meal, and 16,600 of oil. The daily wire has sales of 120,000 metric tons to China, and 126,000 to unknown.
On the May contract, support is the 10-day moving average at $10.41, with resistance the $10.63 3/4, which is the six-month high scored this morning.
Wheat trade is 6 to 17 cents higher at midday with the winter wheat streaking higher again as dry conditions continue to build on the plains. The extended forecast continues to be short on moisture the western wheat belt, with warmer temps helping the crop to exit dormancy.
The dollar index has moved back over 90, and is closing back in on 91 on the index with the rally showing better legs. Black Sea origin values have risen on the export market, but will likely maintain their edge in the near term even as they move over $209 a ton. Weekly export sales were soft again at 191,100 metric tons of old, and 45,200 of new.
On the May Kansas City chart, wheat support is at the 20-day at $4.91, with trade above all other levels of resistance for now.