December corn was up 6 3/4 cents Thursday, boosted by concerns of heavy rains around northern Iowa and bullish export news from USDA. November soybeans were up 20 1/4 cents, likely supported by short-covering related to the same rain and flooding concerns.
Midday: Soybeans lead sharply higher trade at midday.
Corn trade is 7 to 9 cents higher with trade trying to build on the positive finish from Wednesday as harvest continues ahead of more rain. Also, we have continued export interest with Mexico securing 160,000 metric tons of corn, mostly for 2018-19 crop year. Wetter near-term weather may slow harvest progress in many areas this week, while other areas are moving along quickly.
Ethanol margins remain tight with production likely to fade near term even after strong runs last week and futures continuing to trend lower. Corn basis will likely see more pressure harvest here in the near term. The weekly export sales were strong at 1.38 million metric tons.
On the December chart, support is at the fresh contract low printed Tuesday at $3.42 3/4 with the 10-day at $3.54 noted nearby resistance, which we are testing at midday.
Soybean trade is 15 to 20 cents higher at midday with two-sided trade giving way to aggressive buying on trade optimism. Meal is $4.50 to $5.50 higher, and oil is 30 to 40 higher. Soybean basis remains historically wide across the belt with storage and shipping concerns continuing to dominate with more business to South America showing up to feed crushers. Crush margins remain strong in the near term.
Early planting in South America is underway with conditions on the dry side going in but no major concerns expected for a while. The Brazil and Argentina currencies remain historically cheap with the real falling back to the lows.
China lowered tariffs on neighboring countries, which could offer some more workarounds on trade. Weekly export sales showed improvement at 917,600 metric tons of beans, 59,600 of old-crop meal, 77,800 of new meal, 9,600 of old oil and 8,600 of new.
On the November chart support is fresh lows at $8.12 1/4 scored Wednesday, with the 10-day at $8.32 and the 20-day at $8.37 noted resistance levels with trade testing the 10-day at midday.
Wheat trade is flat to 2 cents lower at midday with trade pulling back from the strength on Wednesday even with the weaker dollar and better chart action. World wheat prices have edged lower overnight as well. The U.S. dollar is at the bottom of the recent range.
Russia will continue to work on spring wheat harvest and winter wheat planting with mixed moisture. Australia looks to have more mixed weather in the near term with longer-term dryness still an issue as we get closer to harvest there, and some frost in Western Australia with production estimates sliding. Weekly export sales were in line with recent weeks at 468,400 metric tons.
On the December KC chart, we have support at the 10-day at $5.17, which we moved above today with the 20-day at $5.27 the next round higher.