July soybeans finished up 26 3/4 cents Monday after U.S. Treasury Secretary Mnuchin said both China and the U.S. agreed to suspend tariff proposals while trade negotiations continue. Winter wheat gave back over half of Friday’s gains while July corn ended up a quarter-cent.
Midday: Soybeans surge on trade optimism, with corn flat and wheat in retreat.
Corn trade is narrowly mixed at midday with trade giving back the early gains due to spillover pressure from wheat. Warm weather should dominate the week, with some rains still for the central and northern areas of the belt, with Illinois and Missouri remaining on the dry side. The second crop areas of Brazil are trending back drier in the near term.
Ethanol margins remain stable with the energy complex near the upper end of the range, with Memorial Day demand just around the corner, and futures edging back to $1.51 gallon. The weekly crop progress report should show planting and emergence ahead of normal.
The weekly export inspections remained solid; they were at 1.52 million metric tons. On the July chart we moved back above the 20-day at $3.99 1/2 with the next level of support is 50-day at 3.94 which we tested to start the week, with resistance at the recent high at $4.08.
Soybean trade is 18 to 20 cents higher at midday with trade gapping higher with the trade progress made over the weekend. Meal is $1.50 to $2.50 higher and oil is 25 to 35 points higher. South America’s recent pattern should remain intact near term, with the Real and Peso remaining near record lows to boost export competitiveness, with harvest moving towards the home stretch in Argentina.
Trade optimism is focusing on China’s demand for soybeans and related products, but crush margins have narrowed so far this morning. Weekly crop progress is expected to remain well above normal. The weekly export inspections were strong at 893,680 metric tons.
On the July chart, trade is back just above the 200-day at $10.16 with the next level of support the recent low at $9.93, and the 20-day at 10.26 the next level of resistance.
Wheat trade is 4 to 10 cents lower at midday with the stronger dollar and rains in Kansas bring selling back of the initial overnight trade higher. Warmer weather should help to boost maturity with the crop still behind normal, but catching up with another week of heat likely to add stress to the heading crop. Spring wheat should continue catching up with some acres likely rolling to other crops as we get later in spring.
The Black Sea area will continue to dominate export trade with weather issues limited for the moment but some dryness so far. Black Sea values are moving back towards $204 a ton. Weekly export inspections continue to be lackluster at 341,299 metric tons. Weekly crop progress should be steady with the crop closer to maturity for winter wheat, while spring wheat will remain behind normal.
On the July Kansas City contract support is the 20-day at $5.29 that we are testing this morning with the upper Bollinger Band at $5.65 resistance.