March contracts of corn, soybeans, and all three wheats finished lower Thursday, pressured by a mix of disappointment from this week’s trade meeting with China, a higher-than-expected soybean crop estimate from Brazil and a persistent lack of U.S. wheat export business.
Midday: Soybeans lead midday trade lower.
Corn trade is 4 to 5 cents lower at midday with selling after a flat overnight session with spillover from the soybeans, and good corn production estimate for Brazil. The South American recent weather pattern remains intact with a mix of excessive rain and pockets of dryness with some potential second-week improvement.
Ethanol profitability remains an issue with blender margins improved with the recent energy rally while producer margins remain mired near the lows with ethanol futures fading again this morning.
The government partial shutdown is expected to continue to limit news, including the monthly report this week. Trade talks with China has raised the specter of potential fresh corn exports with good progress reported to have been made with a pause in negotiations for now. CONAB raised production slightly for Brazil to 92.1 million metric tons.
On the March chart support is at the $3.77 1/2 100-day with resistance at the $3.87 3/4 December high then the 4-month high at $3.90 1/4.
Soybean trade is 16 to 18 cents lower with broad selling after CONAB reduced production only slightly. Meal is $5.50 to $6.50 lower and oil is 40 to 50 points lower.
South America weather items remain in the recent weather pattern with harvest going early amid heat and pockets of dryness in Brazil with generally disappointing yields so far, and excessive rain potential in Argentina with potential improvement in the extended forecast.
The few weather problems should mean slightly lower production, with global stocks remaining ample. CONAB reduced Brazil soy estimates 1.1% to 120.1 Million metric tons, which is higher than most private forecasts at the moment. Forecasts are being monitored closely.
March chart support is at the 50-day at $9.04 with resistance at the $9.29 200-day then the upper Bollinger band at $9.36.
Wheat trade is 4 to 6 cents lower with trade moving lower after failing to hold gains yesterday. The dollar hit three-month lows, which should add support if sustained with only a slight bounce this AM. Southern Hemisphere harvest will continue in the near term.
North American winter wheat should have some warmer weather than normal, which in January we usually do not view as a good thing with late emerging wheat especially vulnerable. Russia has continued to export aggressively with domestic prices rising, with yesterday’s sales to Egypt getting close to exhausting bushels in export position.
On the March Kansas City chart, support is the 10-day at $5.00, then the $4.87 1/2 lower Bollinger Band. Resistance is at the 50-day at $5.06 3/4 then the upper Bollinger band at $5.24.