March Kansas City wheat closed up 16 1/2 cents Friday, reversing the bearish mood and taking prices to their highest close in three weeks after USDA released encouraging export news. Corn and soybeans were also higher, supported by hope for trade progress with China.
Midday: Wheat leads positive grain trade at midday.
Corn trade is 2 to 3 cents higher at midday with trade testing the upper end of the range heading towards the weekend. The weekly export sales were good at 1.18 million metric tons which was near the upper end of the range of expectations.
Ethanol margins remain poor with production showing an increase again last week despite little improvement to profitability. Corn basis should likely fade with a firmer board the past week with more open weather likely to help shipping.
On the March chart we have held over the 20-,50-, and 100-day moving averages at $3.77-$3.79, which is our chart support area with resistance at the upper Bollinger Band at $3.88.
Soybean trade is 5 to 7 cents higher at midday with sideways action likely to continue in the upper end of our range until we see more confirmation of fresh sales. Meal is $1 to $2 higher and oil is flat to 10 higher. South America continues to make good progress with early harvest approaching fast, and more talk about further acre expansion in the future.
Basis will provide signals on the quantity of nearby cash business getting done with flat to slightly firmer trade so far this week. The weekly export sales were better at 890,900 metric tons, meal was 287,300, and oil was 21,000 metric tons. January support is at the weekly low at $8.97. Resistance is at the Monday high at $9.35.
Wheat trade is 8 to 16 cents higher on the March contracts support from better exports, and another flare-up in the Azov Sea overnight with Kansas City trade leading. Russian exports have showed signs of slowing down. The weekly export sales number was supportive at 711,000 metric tons, plus the USDA announcing at HRW sale to unknown of 224,000 metric tons.
The dry areas of Europe are expected to catch up on moisture in the near term. Egypt has delayed shipment on recent purchases, but it is not expected to be a lasting issue. Iraq bought some U.S. wheat. Australian harvest should continue to make progress in the near term.
On the March Kansas City chart support is at the 20-day at $4.99 that we cleared this morning with the 50-day at $5.20 the next round up.