July contracts of corn, soybeans, and all three wheats fell lower Friday, as traders sensed better planting weather ahead and the start of light to moderate showers in the southwestern Plains. The June U.S. dollar index is also higher, adding bearish pressure to the grain sector.
Midday: Trade is lower across the board at midday with wheat the downside leader.
Corn trade is 4 to 6 cents lower at midday with trade slipping below the $3.80 area ahead of May option expiration Friday. Fieldwork should expand in some areas this week with drier pockets to the east with warmer temps expected to wait until next week. Delays are expected to persist in Iowa and Minnesota.
The second-crop areas of Brazil look to remain on the dry side in the near term as well. Ethanol futures have edged back over the $1.50 mark, boosting margins.
On the May chart, we are just below the 20-day at $3.82 3/8 with the 100-day at $3.71 becoming support if we fade into the weekend.
Soybean trade is 4 to 8 cents lower at midday with trade sliding below nearby support heading toward option expiration Friday. Meal is $2 to $3 higher, and oil is flat to 10 points lower, with meal values catching a bid this morning. Oil is at the low end of the recent range. Crush margins remain positive overall, but they have narrowed.
The recent pattern in South America should remain intact near term, allowing for greater progress in Brazil harvesting, with values remaining elevated for Brazilian producers to encourage harvest selling in the near term.
The U.S. export wire has quieted down the last few days with no announced sales in a week. Trade will be looking for signs of additional acres, with the weather challenges rolling acres over from wheat and corn.
On the May contract, trade has slipped below the 50-day at $10.38, with the 100-day at $10.15 as the next level of support.
Wheat trade is 8 to 12 cents lower at midday with option expiration and still some near-term rain in the forecast. Warmer conditions coming should help to boost maturity, with rain needed to shake off freeze damage along with salvaging diminished potential.
Spring wheat growing areas look more open, but will need to thaw for better progress to be made. Spring wheat seeding is behind in Russia for the moment, but should see better catching-up going forward. The slide in the ruble is helping Russia’s export advantage, while the stronger dollar is hurting us on Friday.
On the May KC contract, support is at the 20-day at $4.88, which we have eased below at midday, with the 100-day at $4.70 below that. Resistance is the 50-day at $4.97.