July K.C. wheat closed up 15 cents, nearly reaching it highest prices in 10 months with hot temperatures in store for the southwestern Plains through Memorial Day weekend. Friday’s trading was light, but also saw modest gains posted for corn and soybeans.
Midday: Wheat leads at midday with soybeans and corn firmer heading towards the long weekend.
Corn trade is 1 to 2 cents higher at midday with trade following the lead of the firmer soy and wheat trade this morning, but we remain below the fresh highs scored yesterday with little fresh buying enthusiasm so far. Warm weather should dominate the week, with rain coverage looking better for the west, and better for the second week out with some model disagreement.
The second crop areas of Brazil are trending back drier in the near term with some storm damage. Ethanol blender margins are narrowing with the energy complex pulling back well of the recent highs, while corn remains elevated along with ethanol futures holding over $1.52.
On the July chart we moved back above the 20-day at $4.02 with the next level of support is 50-day at 3.95 which we tested to start the week, with resistance at the fresh high at $4.12 1/4.
Soybean trade is 3 to 6 cents higher at midday with trade trying to regain the momentum lost yesterday. Meal is $2 to $3 higher and oil is 25 to 35 points lower. Trucker strikes are disrupting logistics in South America as harvest winds down, and China was booking late summer soy cargos off the West Coast with sales of 312,000 metric tons of new crop sold today, along with 165,000 of option origin.
Crush margins have narrowed but remain positive, with meal starting to find buyers again with trade $10 off the lows but struggling to hold gains. Basis has remained steady, with trade likely to remain quiet into the weekend.
On the July chart, trade is just above the 50-day at $10.38, with the upper Bollinger Band at 10.64 the next level of resistance.
Wheat trade is 6 to 11 cents higher at midday with trade trying to shake off the turn lower yesterday, with profit taking likely going into the long weekend late in the session. 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 with areas south of I-70 starting to change.
Some better rain potential was showing for Kansas in the overnight forecast but it is getting late to matter, especially for the second week. Spring wheat should see better progress with warmer weather helping to catch up emergence, with Canada remaining on the dry side.
The Black Sea area will continue to dominate export trade with growing concerns about drier winter wheat, and slow spring wheat seeding. Black Sea values are at $206 a ton. India is raising import tariffs as well.
On the July Kansas City contract support is the 20-day at 5.37, with the upper Bollinger Band at 5.65.