November soybeans jumped 28 cents higher Thursday with shorts on the run after news broke that China is sending a delegation of officials to Washington later this month to talk trade. Corn and wheat prices also joined Thursday’s rally, even though weather conditions are mostly favorable in the central U.S.
Midday: Firmer midday trade is seen with soybeans leading the way upon trade optimism.
Corn trade is 4 cents higher at midday with spillover support mostly from beans. The range has been a penny lower to just over a nickel higher. Last night news that trade negotiations with China were expected and optimism toward buying beans helped spark a quick 20 cent rally in beans. Market bears argue this is still part of the game, and the big bearish supply side market fundamentals are taking prices lower on its own.
The lower prices are finding the demand, not some good will toward negotiations. The market knows China likes U.S. beans. The weekly ethanol report yesterday was mixed with production down 28,000 barrels per day, with stocks up 94,000 barrels, with margins continuing to stay narrow.
Corn basis will likely continue to fade with more harvest activity building with the advanced crop and with the higher board. The weekly export sales were good at 339,000 tons of old crop and 1.044 million tons of new.
On the December chart futures have support at the $3.66 low scored on Monday as follow-through selling after the bearish WASDE report. Resistance is at the $3.88 1/2 two-month high.
Soybean trade is 20 to 27 cents higher at midday, meal is up $5 to $6 and soybean oil is up 30 points. Some of this strength is short covering and chart related with shorts that piled on after the bearish USDA report on Friday, getting out with losses.
We moved above the 10-day and 20-day moving averages, in between $887-889 on November beans, which turned the chart positive. The optimism toward China demand is the talk, but I think we need to expect a long game.
The weekly export sales were okay at 133,400 tons of old crop and 571,600 tons of new. Meal sales were 207,200 tons of old and 147,300 tons of new with bean oil 4,800 tons of old and 300 of new.
On the November chart support is at the $8.89 10-day, then down at the $8.51 one-month low printed on Monday. Resistance is the $8.99 1/2 early morning high then the $9.22 2-month high.
Wheat trade is 8 to 13 cents higher at midday with trade looking to reverse from the post-report weakness. Spill over support from the row crops along with a good weekly sales report is noted for the higher trade. Spring wheat harvest should continue to move along at a good clip.
The strong US dollar is keeping the U.S. less competitive on the world market with the ongoing issues with Middle Eastern importers focusing on the Black Sea for origination. Matif wheat solidly higher this morning, giving us support as well. Australia remains on the dry side with the crop pace ahead of normal as well with some relief for some areas. The weekly export sales were good at 803,000 tons giving the market support.
On the December KC chart we have support at the low printed yesterday at $$5.60 3/4 then the 100-day at 5.55, with resistance the 10-day at 5.89. We are flirting with the 20-day at midday which is at $5.76.