Corn and soybean futures continue to hold gains, with soybeans up again Wednesday, projecting optimism that China will act soon on their Group of 20 promise to buy significant quantities of U.S. ag, energy and other products. Chinese web sites are hinting at some large purchases of not only soybeans, but also corn, wheat and ethanol. Wheat is again showing weakness on slack exports, more hard wheat deliveries, the re-opening of the Ukraine shipping path, along with drought alleviating weather in the EU and Black Sea regions.
Midday: Row crops firmer, wheat struggling at midday.
Corn trade is 1 to 2 cents higher at midday with trade still working to consolidate the gains above $3.80. Ethanol margins remain poor with the energy complex needing to sustain a rally to improve margins into winter with ethanol futures slightly better this week with the weekly report delayed until tomorrow.
Corn basis should likely fade with a firmer board, but winter weather will slow movement in the near term keeping most action steady this week. On the March chart we have jumped over the 20-, 50-, and 100-day moving averages at $3.77-$3.78 with next resistance the upper Bollinger Band at $3.88.
Soybean trade is 1 to 3 cents higher at midday with confirmation of better exports with the trade deal still being waited on. Meal is flat to $1.00 lower and oil is flat to 10 points higher. South American continues to make good progress with rains expected for Argentina, and Brazilian private production estimates moving towards 130 million metric tons.
Basis will provide signals on the quantity of nearby cash business getting done with flat to slightly firmer trade so far this week. January support is now the week low at $8.99 1/2 still leaving a gap from 8.95 Sunday, with resistance the Monday high at $9.35.
Wheat trade is 3 to 7 cents lower at midday with rains in Europe, shipping delays to Egypt, and consolidation action slowing the recent rally. Kansas City wheat has continued to narrow the discount to Chicago in recent days, but is slightly wider again this morning.
Russian exports have showed signs of slowing down, but Ukraine shipments have resumed around the Azov Sea. Australia confirmed their smallest crop in a decade. The dry areas of Europe are expected to catch up on moisture in the near term.
On the March Kansas City chart we have support at the 20-day at $5.01 which we are just below at midday with the 10-day at $4.94 below that with the upper Bollinger Band at $5.23 as resistance.