January soybeans fell 6 1/2 cents Friday, still not impressed by a second day of export sales to China and also influenced by a commodity board that was nearly all red. March corn was one of the few commodities that survived with a slight gain, while all three wheats showed modest losses in the face of Friday’s higher U.S. dollar.
Midday: Corn leads at midday, with soybeans and wheat drifting lower.
Corn trade is 1 to 2 cents higher at midday with action remaining just below the recent highs scored midweek. Corn basis looks to be flat in the near term with better weather improving movement potential.
Ethanol margins remain under pressure with energies remaining at the lower end of the range and ethanol futures remaining flat. USDA announced 125,000 metric tons of corn sold to Japan, and there is talk China could be in the import market after the first of the year. Milder weather should allow harvest to wrap up overall.
On the March chart the 20,50, and 100-day moving averages at $3.78-$3.80 is our chart support area with resistance at the new high scored at $3.87 3/4.
Soybean trade is 1 to 3 cents lower with trade coming back from the 6-8 cent lower trade earlier in the overnight session with overall rangebound action still continuing. Meal is flat to $1 higher and bean oil is 10 to 20 points lower.
South America continues to make good progress with early harvest approaching fast with a few dry pockets in Brazil drawing more worry. Basis will provide signals on the quantity of nearby cash business getting done with flat to slightly firmer trade so far this week.
China purchases look to be in the 1.5 to 2.0 million metric tons the last couple days with 300,000 more confirmed today, along with 130,000 to unknown. Big picture, US origin is the economic choice for China in the three-month horizon, but once the bulk of the 2019 Argentine and Brazilian crop is harvested that likely will not be the case.
January support is the 20-day at $8.96, with the 10-day at $9.11 just above the market with the recent high at $9.29 above that.
Wheat trade is flat to 4 cents lower with trade holding the recent gains with improving exports helping to support the market, and spread unwinding favoring the Kansas City contract. The dollar has firmed sharply this morning with trade remaining near the upper end of the range.
Australian harvest will continue in the near term. North American winter wheat is seeing milder weather, helping late emergence. Russian/Ukrainian tensions have ramped up again.
On the March Kansas City chart support is at the 50-day at $5.18 that we closed above yesterday with the upper Bollinger Band at $5.21 just above the market and the 100-day the next round up at $5.44.