September Minneapolis wheat jumped up 17 cents Friday, boosted by increased drought in the Pacific Northwest and talk of wildfires burning wheat fields in Oregon. U.S. winter wheat prices also traded higher with ongoing dry weather concerns in Europe and helped by Friday’s lower U.S. dollar after President Trump repeated his criticism of the Federal Reserve’s plan for higher interest rates.
Midday: Wheat and corn lead at midday, with soybeans flat.
Corn trade is 3 to 4 cents higher at midday with trade continuing to firm after the strong close yesterday. On the chart, it appears the market is trying to move through nearby resistance, with trade moving above another level overnight with a positive close needed to confirm.
Cooler weather looks to hang around the next couple weeks with mixed moisture potential with a growing focus on early August weather with the advanced state of the crop.
Ethanol board margins remain positive but have narrowed with firmer corn and weaker energy trade, but ethanol futures trending back higher to narrow blender margins, although they remain strong. Corn basis has been flat to firmer for the most part.
On the September chart futures are above the 10-day at $3.47, with the 20-day at $3.52 the next level to close above, with trade 3 cents above that area at midday, the next level of resistance would be the upper Bollinger band at 3.67. Support is the fresh low of $3.37 1/4 scored last week, which is also the level of the lower Bollinger Band.
Soybean trade is 1 to 3 cents higher at midday with trade shaking off fresh tariff talk to keep moving higher with the market looking for 5 straight days of gains. Meal is flat to $1.00 lower, and oil is 10 to 20 points higher. Brazil remains at a stout premium to US origin, still running $2.00 or better, which mostly offsets the tariffs.
Bean basis has remained steady with processors taking the lead with crush margins remaining exceptionally strong. Weather should not be a major driver near term for soybeans due to limited stressful forecasts but with pod fill starting, beans could be more active based upon any forecast changes.
On the August chart, the 10-day at $8.40 is again the first level of support, which we have not been able to follow through with further support the lower Bollinger Band at 8.15 with the next level resistance the 20-day at 8.54.
Wheat trade is 10 to 18 cents higher overnight with trade consolidating it’s push through the $5.00 area on front month winter wheat, with Chicago and Kansas City trade moving over that level overnight, and better spring wheat action today.
Harvest pressure should start to fade as it winds down for the winter wheat. Spring wheat progress will slow a bit in North America with the cooler weather.
Russian harvest continues to move along as well with yields remaining below last year’s levels as they get into spring wheat harvest, although they have improved a little more as harvest expands. Western Europe continues to see excessive heat as harvest moves forward there. HRW basis has remains solid through harvest with the better protein with offered premiums declining.
On the September chart, Kansas City is back above the 20-day at $4.89 and the 10-day at $4.91 at midday with the 200-day at 5.11 the next level of resistance, which we have tested this morning, with the next round of resistance at the 50-day at 5.23.