Despite wheat and corn sales last week that fell well below expectations, and the fact that U.S. exporters continue to miss export sales, wheat led a strong early rally, with the corn market in tow. Wheat faded into the close, with Kansas City moving lower, while Chicago held onto modest gains. Soybeans, disappointed that China has still not bought 8 mmt of promised purchases, fell to modest losses.
Midday: Wheat and corn lead the broadly firmer trade at midday.
Corn trade is 4 to 5 cents higher at midday with stronger buying developing again during the day session, with spillover support from wheat. South America crop progress looks to remain on track for corn with some shorter-term dryness possible in Brazil on the double-crop acres.
Ethanol margins remain under pressure for producers, with blender margins set to remain strong with ethanol futures testing the recent highs this a.m. Corn basis will be supported by ongoing weather issues nearby with Gulf offers struggling along with logistics issues building with the river system to see more stress from melting snow along with poor road conditions.
Early planting is going in the south as well with weather concerns likely to build in the north into March with flooding the main concern with the Mississippi and Missouri rivers seeing big inflows. Weekly export sales were disappointing at 372,000 metric tons of old crop, and 474,600 of new crop.
On the May chart, support is at the $3.61 contract lows which were tested this morning. Resistance is at the $3.68 1/2 10-day moving average, which we are above at midday, with the 20-day at $3.74 the next roundup.
Soybean trade is 1 to 2 cents higher at midday with trade setting back on trade talk delays after pushing back through $9.00 yesterday before firming back on spillover strength from corn. Meal is $1.00 to $2.00 higher, and oil is 20 to 30 points lower.
With a trade deal delayed until at least April, buying enthusiasm has been blunted. South America weather should maintain the recent pattern in the coming days with Brazil harvest moving along and normal progress in Argentina.
Crush margins remain strong overall with meal still holding $300 with record February crush expected on Friday. Weekly export sales were strong at 1.91 million metric tons.
On the May chart support is at the $8.89 1/2 low printed Tuesday with resistance at the $9.03 10-day moving average.
Wheat trade is 6 to 10 cents higher at midday with more short covering emerging during the day session again. Spreads are pretty steady this morning. Export news has been quieter lately on the world front with sales disappointing at 263,000 metric tons of old crop, and 83,000 of new.
The dollar has come back to 96.70 on the index with choppy trade bouncing this morning. Cooler-than-normal weather will keep wheat development slow on the Plains, and spring wheat planting likely to start slow this year. Wheat basis varies widely on product and location.
On the May Kansas City chart, support is low at $4.18 3/4 fresh low with resistance at the 10-day at $4.37, which we are above at midday, with the 20-day at 4.49 1/2 the next roundup.