Following Tuesday’s sharp rally in both corn and soybeans on renewed optimism for a U.S.-China trade deal, and the unlikely shutdown of the U.S. government, prices Wednesday are back to their choppy, sideways pattern. Wheat finished just slightly higher, after Minneapolis had solid early gains. Minneapolis saw midday gains of 7 3/4 cents — likely a function of much higher freight costs and logistical issues, and a surging basis, as heavy snows and cold will continue to hit the PNW and Northern Plains.
Midday: Wheat is the midday leader with row crops fractionally lower.
Corn trade is flat to 2 cents lower with trade working a narrow range during the day session far after lightly positive overnight trade.
The second crop in Brazil is being planted in good condition for now with planting heading towards the halfway point with early rains looking to be good for germination. The weekly ethanol report showed production rebounding sharply to run ahead of year ago levels, with stocks down another 400,000 barrels, with ethanol futures moving back up to $1.33.
Corn basis should firm again with more weather disruptions. On the March chart trade is back into the resistance clustered at $3.77-$3.79, with support at the lower Bollinger band at $3.73 3/8, and the then low at $3.71 3/4.
Soybean trade is 1 to 2 cents lower at midday with trade continuing to work the recent range with little fresh news. Meal is flat to $1.00 lower and oil is 10 to 20 points lower.
South America weather should maintain the recent pattern in the coming days. Crush margins remain strong with meal holding $300 a ton or better still, with basis likely to remain steady to firmer on weather and the futures pull back. More private sources in Brazil continue to migrate production towards the 112 million metric tons area with CONAB at 115 million metric tons, but a downward bias to their reports. Trade talks are underway in China.
On the March chart support is now the moving averages clustered at $9.13-9.15 and resistance the upper Bollinger band at $9.29.
Wheat trade is flat to 6 cents higher at midday with trade being led by Minneapolis with firmer spread trade again. The U.S. has seen better export business lately, with a focus on further nearby business with some basis moves into export channels. The dollar rally has paused today at the top end of the range. Cold weather is expected to keep some stress on the plains in the near term with winter wanting to hang around.
On the March Kansas City chart support is low at $4.87 1/2 with resistance the 10,20, and 50-day moving averages clustered at $5.01-5.04.