While corn and Kansas City wheat extended weekly gains, soybeans refused to go along Friday. Very heavy rains projected for much of the Corn Belt will likely cut acres and compromise yield, while key spring wheat states will also be hard pressed to make much progress.
Midday: Corn and wheat remain bid on weather, with soybeans fading.
Corn trade is 3 to 4 cents higher at midday with support from the continued wet forecasts with some planting progress this week, with more focus on potential acre losses coming forward with December corn unable to move through $4.00 so far.
Drier weather will end for most going into the weekend. Ethanol margins are narrowing fast with ethanol futures unable to keep pace with the corn rally with slight gains this morning. Basis has seen selling pressure from farmer movement.
On the July nearby chart support is the 100-day at $3.81 which we moved above overnight, with the 200-day at $3.87 the next level up.
Soybean trade is 10 to 12 cents lower at midday with trade struggling to extend higher with fears of higher acres and poor demand along with spread unwinding. Meal is $4.50 to 5.50 lower and oil 35 to 45 points lower. Crush margins remain solidly positive. South American currencies remain cheap at the end of harvest, but rising basis is helping US offset somewhat.
Field work should generally remain slow in the near term but more progress is likely into next week with little incentive for farmers to push right now. Trade talks are expected to continue, but more U.S. gov’t payments to farmers looks to be the more likely outcome at this point with up to 20 billion in aid promised, and the exact set up still to be determined.
The July chart support is the 10-day moving average at $8.25, with with the 20-day at $8.44 just above the market.
Wheat trade is 2 to 6 cents higher at midday with the higher protein wheats leading, and the Kansas City/Chicago spread looking to put in a reversal. Europe and the Black Sea area will be watched with dryness in the Volga Valley, and wet weather in the U.S. potentially limiting planting and causing disease issues in the winter wheat.
The dollar remains rangebound but firmer. Hard red wheat is working into feed rations in some areas with the bounce in corn values.
On the July Kansas City chart, support is the 20-day at $4.05 that we moved above yesterday, with the 10-day at $4.04 below that, and the 50-day at $4.27 the next round higher which we have tested.