Trade quietly mixed ahead of the WASDE report.
Corn trade is flat to a penny higher at midday with trade remaining near the lows ahead of the report, after trade talks failed to reach a resolution overnight. Drier weather should be the rule for the next seven days, with below normal temps expected for most with rains expected to return after that. Ethanol margins remain stable with softer corn and energies along with flat ethanol futures.
Basis will be choppy with river disruptions, and mixed demand, along with slow movement by farmers. The USDA monthly report is expected to show the large carryovers on Friday, including the new balance sheet for 2019-20; the average guess is 2.061 billion for old crop, and 2.142 billion for new crop.
On the July nearby chart support is the contract low at $3.51 1/2 with trade fading back below the 10-day and 20-day moving average at $3.63, with the 50-day at $3.73 1/2.
Soybean trade is 2 to 4 cents lower at midday with early gains fading again after trade talks failed, with the next steps up in the air ahead of the report. Meal is flat to $1.00 lower and oil is flat to 10 points lower. Crush margins should still be positive in the near term, but remain well off the recent highs.
South American currencies remain cheap at the end of harvest, but their basis is starting to firm which will help U.S. competitiveness if sustained. Field work should generally remain slow in the near term but more progress is likely into next week. Trade talks are expected to continue, but more US gov’t payments to farmers looks to be the more likely outcome at this point.
The Supply and Demand report on Friday will restate the large carryovers yet again with the average guess on old crop 925 million bushels, and new crop 943 million. CONAB lowered Brazilian export expectations by 2 million metric tons as well. The July chart support is the fresh low at $8.06 1/2, with resistance the 10-day moving average at $8.43.
Wheat trade is flat to 2 cents higher with trade grinding along as cold air moves into the U.S. Plains. Europe and the Black Sea area will be watched more as their growing season keeps moving with mixed to good conditions so far and spring wheat seeding ongoing at a good clip, and Russian domestic prices fading again. The forecast does look to be trending drier short term. The dollar has drifted back to the lower end of the range. The WASDE report is expected to show old crop carryout at 1.1 billion bushels, and new crop at 1.073 billion.
On the July Kansas City chart, support the fresh lows at $3.90 1/2, with the lower Bollinger Band at $3.87, and resistance the 10-day at $4.00 3/8 which we are just below, with the 20-day the next round up at $4.11 1/8.