In the aftermath of Tuesday’s election, the stock market is trading higher, but grains are showing no such enthusiasm, still focused on problems of over-supply ahead of Thursday’s WASDE report. January soybeans fell 4 3/4 cents and December K.C. wheat dropped 5 3/4 cents, while their respective trends remained sideways.
Midday: Grains lower across the board at midday.
Corn trade is 1 to 2 cents lower in quiet midday action keeping us range bound ahead of the report tomorrow. Position squaring with some light long profit taking may be what we see in between now and Thursday morning in slow trade.
The weekly ethanol production report showed production up 9,000 barrels per day, stocks were up 404,000 barrels after last week’s big draw. Ethanol futures remain flat keeping the margin pressure intact.
Looking to Thursday the monthly USDA World Agricultural Supply and Demand Estimates (WASDE) is expected to have the corn yield drop to 180.0 bushels per acre versus 180.7 on the October report; the range of estimates is 178.2-181.4.
The corn carryover is expected to come in at 1.781 billion bushels versus 1.813 on the October report; the range of expectations is wide at 1.566-2.105 billion. The world carryover estimate is at 198.3 million metric tons versus 198.2 million tons a month ago.
On the December chart support is at the 10-, 20-, and 100-day moving averages in the $3.67-3.68 area with resistance the recent $3.78 1/2 high.
Soybean trade is 5 to 7 cents lower at midday with selling pressure at midday. Meal is 2.50 to 3.50 lower, and oil is 15 to 25 points higher. There is limited fresh news with the market finding support on export optimism while the carryover stocks continue to weigh on the complex.
Looking to Thursday, the WASDE yield estimate is expected to be at 53 bushels per acre versus 53.1 on the October report. The trade is expecting the carryover to increase to 900 million bushels versus 895 on the October report; the range of estimates is 832-984 million. The world carryover is expected to be at 96.9 million metric tons versus 96.7 a month ago.
On the January chart, support is at the 100-day at $8.77 with the 20-day further support at $8.74, and resistance at the Friday high at $8.92.
Wheat trade is mixed at midday with trade remaining rangebound in moderate action with the higher protein wheats the weaker part of the complex. Also in the bigger picture oversold conditions remain and could turn and surprise the market with a short covering rally which has been typical periodically in wheat.
The average trade guess for the US carryover on Thursday is at 966 million bushels versus 956 last month; the range of estimates is 925-1.025. The world wheat carryover is expected to be at 275 million metric tons versus 274.9 mmt a month ago. Russian wheat continues to move into the export market at a very rapid pace.
On the December Kansas City chart, we are above the 10-day moving average at $4.98, with resistance at the 20-day at $5.09.