USDA threw a lot of new estimates at traders on Friday and when the final bell rang March soybeans, Chicago and Minneapolis wheat ended with small gains, while March corn and K.C. wheat posted small losses. We can’t say the market saw any major surprises and next week’s attention will turn back to trade talks with China.
Midday: Trade is mixed in quiet action ahead of the report.
Corn trade is 1 to 2 cents higher at midday with light buying on position squaring overnight ahead of the WASDE and Stocks report release at 11 a.m. The trade is focused on the number but at this juncture no major changes are expected nor changes in South American weather. Looking to the report the trade is looking for Dec 1 corn stocks to be at 12.09 billion bushels, 450 million lower than last year.
The 2018 yield estimate to slip to 177.9 BPA with production of 14.532 bushels. The domestic carryout is expected to be at 1.708 billion bushels versus 1.781 billion on the last USDA report. The world stocks at 307.6 million metric tons versus 308.8 in December.
Ethanol margins remain poor with the recent futures gains fading this week with board getting back to $1.28, just off the recent lows. Corn basis has remained flat to weaker with improved movement and more open weather.
On the March chart support is the $3.73 lower Bollinger Band. Resistance is at the nearby trendline resistance at $3.82, the $3.87 200-day moving average.
Soybean trade is narrowly mixed in quiet pre-report trade. Meal is $1 to $2 higher and oil is 15 to 25 points lower. South America weather looks to continue to drift towards improvement in Brazil and Argentina with harvest continuing to move in Brazil and pod fill just about to start in Argentina.
Crush margins remain strong overall, with basis likely to turn steadier on weather and the futures pull back. Report expectations are for 3.743 billion bushels for the Dec 1 stocks, vs. 3.161 last year. The updated 2018 yield estimate is at 51.8 BPA and production of 4.569 billion.
Domestic carryout is expected to be at 926 million bushels, and world stocks at 112.67 million metric tons. Trade talks are expected to resume next week, but the highest-level meetings are expected until after the initial deadline.
On the March chart resistance is at the $9.31 high printed Friday, then the $9.41 area where we find the seven-month high. Support is 50-day at $9.12 that we are testing at midday then the $8.96 100-day moving average.
Wheat trade is 1 to 7 cents higher with Chicago trade finding buyers again, along with firmer spread trade returning after the washout yesterday. Egypt secured two cargos of U.S. SRW in a bit of a surprise. The dollar rally has slowed again.
Southern Hemisphere harvest will continue in the near term. North American winter wheat areas have snow cover which is why the extreme cold did not boost trade with colder air working back this week. Russian values continue to work higher as well for the export market.
On the report, stocks are expected to be 1.957 billion bushels, with winter wheat acres at 32.158 million, down about 400,000 from last year. Domestic carryout is expected to be 989 million bushels, and world stocks at 268.09 million metric tons.
On the March Kansas City chart support is low at $4.95 1/2 with resistance the 10,20, and 50-day moving averages clustered at $5.05.