Wheat and soybean markets continued their bearish slide Tuesday, this time dragging a stubborn corn market with them. No news is bad news for these markets, which have traded on many unsubstantiated demand rumors for weeks. News that world wheat values plunged again last week, that African swine fever continues to expand in China and has shown up in Vietnam now, added more fuel to the fire. It appears that optimism on China trade talks is not enough to keep markets up.
Midday: Early gains out of the holiday give way to broad selling during the day session with wheat the downside leader again.
Corn trade is 2 to 3 cents lower with early gains fading with wheat trade providing spillover pressure to start the week. The second crop in Brazil is being planted in good condition for now. Planting is heading past the halfway point with early rains looking to be good for germination. The energy complex is maintaining recent gains to support ethanol a little more in the near term with better seasonal action getting close.
Weather is still limiting driving for now with ethanol margins lower this week. Corn basis should firm again with more weather disruptions. The weekly export inspections were decent at 941,811 metric tons.
On the March chart, trade has support at the recent $3.71 1/4 low, with the lower Bollinger Band at $3.72 3/8. Resistance is still clustered at $3.67-$3.78.
Soybean trade is 3 to 6 cents lower at midday with trade holding just above $9.00 as trade talks resume in the U.S. this week. Meal is $1 to $2 lower, and oil is narrowly mixed.
South America weather should maintain the recent pattern in the coming days. Brazil’s harvest is moving along, and drier weather is forecast in Argentina. Crush margins remain strong with meal holding $300 a ton or better still, with January crush remaining strong.
Trade talks will continue in the U.S. this week with some progress scored this week, according to most sources, and the March 1 deadline looming. Weekly export inspections were decent at 1.031 million metric tons.
On the March chart, resistance is now the moving averages clustered at $9.13-9.15, which we just below, and then the $9.01 support level from the early session lows, which is also the 100-day moving average.
Wheat trade is 9 to 13 cents lower. Winter wheat is holding up slightly better with firmer intra-month trade still showing, while the spring wheat spreads have moved a nickel wider. The U.S. has seen better export business lately, but world prices have followed the U.S. selloff the last couple of days with European action stabilizing on Monday before selling returned.
The dollar remains near the upper end of the range but is reversing today. Cold weather is expected to keep some stress on the Plains in the near term, with winter wanting to hang around. Weekly export inspections were disappointing at 357,131 metric tons.
On the March KC chart, support is low at $4.67 with resistance the 10-day at $4.91.