DTN Grain Midday: Early Buying Fades from Soybeans

Corn and wheat lead at midday with soybeans fading again.

CORN

Corn trade is 2 to 3 cents higher at midday with trade bouncing back from the selling on Tuesday so far, moving back towards the middle of the range. The South American recent weather pattern remains intact with a mix of excessive rain and pockets of dryness with some potential improvement.

The weekly ethanol report showed production up 51,000 barrels per day, 0.94% behind last year’s pace, with stocks rising again, causing ethanol margins to deteriorate further. Winter weather will likely slow corn movement again, keeping basis flat to firmer.

The government partial shutdown is expected to continue to limit news. Trade progress was down played by the administration yesterday.

On the March chart support is the lower Bollinger band at $3.70 1/2 with the 100-day at $3.77 now resistance.

SOYBEANS

Soybean trade is flat to 2 cents higher with support from weather concerns reemerging overnight, with early buying fading yet again. Meal is flat to $1.00 higher and oil is flat to 10 points higher.

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.

Chinese trade data continues to disappoint, raising concerns about demand coming forward until we see more substantial trade progress with confirmed purchases of U.S. beans 18 million metric tons behind last year’s pace.

December crush set a record at 171 million bushels reflecting strong crush margins and domestic use. Forecasts are being monitored closely. Support is the lower Bollinger band at $8.81 with resistance at the $9.05 50-day above that.

WHEAT

Wheat trade is 3 to 6 cents higher with trade following corn higher. The dollar has bounced, but faded after the Brexit deal rejection Tuesday.

Southern Hemisphere harvest will continue in the near term. North American winter wheat should see a cool down this week, with snow cover expected in front of the cold snap for most areas but will need to be watched. Russia domestic prices will be watched closely with firmer values again there.

On the March Kansas City chart, support is the $4.88 1/2 lower Bollinger Band. Resistance is at the 10-day at $5.02, and then the 50-day at $5.05.

General Comments

The U.S. stock market indices are firmer at midday with the Dow futures up 150. The interest rate products are firmer. The dollar index is 5 points lower. Energies are mixed with crude down $0.30. Livestock trade is mostly lower. Precious metals are firmer with gold up $6.

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