July soybeans fell another 21 3/4 cents Friday after President Trump approved roughly $50 billion of new tariffs against Chinese goods — a move that may lead to retaliatory tariffs on U.S. soybeans as well as other goods. Corn and wheat ended the bearish week with small losses on Friday, while gold and crude oil saw sharp drops.
Corn is the midday leader with trade well off the overnight lows with the chart looking like an upside reversal at midday.
Corn trade is 2 to 4 cents higher at midday with trade bouncing sharply off the overnight lows with sell the rumor buy the fact action in place. Forecasts remain in flux with heat and rain featuring for most with heat looking to intensify into the weekend with forecast disagreement after that, with better rains for the western belt.
Harvest should continue to expand in the double crop areas of Brazil. Ethanol margins have narrowed this morning with the energy complex weakness. Basis has been flat to firmer in recent days with the lower board.
On the July chart we remain below the 10-day, at $3.75 which is now nearby resistance and then the 200-day at $3.82. Nearby support is the $3.55 fresh low which we are 12 cents above at midday!
Soybean trade is 8 to 10 cents lower at midday with two sided action after tariffs announcements with lows around 24 cents lower. Meal is flat to $1 higher and oil is 45 to 55 points lower. Meal is now $70 off the highs. Bean basis has remained steady, with trade likely to remain quiet in the near term as old crop exports remain slow. We remain well away from the key soybean weather time frame keep concerns limited for now.
Formal tariffs by China and possibly Mexico are likely to be announced over the weekend. Brazil continues to struggle with the logistical issues compounded by the trucker strikes with a large shipping line up.
On the July chart, trade is back below all the major moving averages with the 10-day at 9.63 the first level of resistance, with the lower Bollinger Band at 9.18 support.
Wheat trade is mixed at midday with winter wheat contracts leading the charge back off the lows. Wet weather for Kansas should slow harvest in the next week or so, but good progress is likely through Monday. Spring wheat should see better progress with warmer weather helping to catch up emergence along with more rain while Canada remains drier. Australia should see some improvement but overall remains mixed.
The Black Sea remains on the dry side near term, with Russian spring wheat weather remaining mixed with improvement in Ukraine. HRW basis has improved ahead of the anticipated harvest protein improvement and board weakness.
On the July Kansas City, we are just above the 20-day moving average at 5.19 with the 50-day at $5.31 above that. Support is the $4.96 200-day moving average.