December corn closed up 12 1/2 cents after USDA cut over a billion bushels off the 2019 U.S. corn crop estimate, a nod to this spring’s planting problems. Soybeans ended slightly higher and wheat prices were modestly higher, but neither could point to bullish reasons in Tuesday’s WASDE report.
Midday: Light selling across the board ahead of the report.
Corn trade is 3 to 4 cents lower at midday with trade fighting back off the lows again overnight, with trade staying above the Sunday night low ahead of the report. The forecast looks to be cooler short term with moisture mixed and focused east. Ethanol margins remain tight, and in a sideways trend with ethanol futures softer this morning.
Basis has been flat to firmer in recent days as movement slows. The WASDE report is expected to show old-crop carryout at 2.165 billion bushels, new crop at 1.731 billion, down from 2.485 on the May report. The new crop world average trade guess is at 323.6 million metric tons of old, and 301.60 million of new versus 314.71 new on the May report.
The weekly progress report pegged planting at 83% vs. 99% on average, with 62% emerged vs. 93% on average, and initial good to excellent at 59%, and 9% poor to very poor, mostly inline with expectations.
On the July nearby chart support is the $4.05 20-day moving average with trade below the 10-day at 4.21 1/8.
Soybean trade is 2 to 4 cents lower with trade chopping lower pre-report. Meal is flat to $1.00 higher and oil 5 to 15 lower. Crush margins remain solidly positive overall with meal remaining above $310. South American currencies have firmed as they control the world export business but remain on the lower end of the range. Field work should expand in many areas into midweek especially in the west.
The corn/soybean ratio has been more stable here as more crop insurance days pass. The WASDE report is expected to show old-crop carryout at 1.010 billion bushels, and new 987 million, and world stocks at 113.10 million metric tons of old crop, and 114.70 million of new. The weekly crop progress report showed 60% planted vs. 88% on average, and 34% emerged vs. 73% on average.
The July chart support is the 20-day at $8.51, with the trade testing the 50-day at $8.66 before fading again.
Wheat trade is 1 to 7 cents lower with Chicago holding up the best at midday and more rangebound trade developing. The Kansas City/Chicago spread narrowed slightly to start the week before moving back to new highs this morning. The heavy rains should be more limited for the Plains in the near term with harvest starting to move. The dollar rally seems to be fading again.
Hard red wheat is working into feed rations in some areas with the bounce in corn values, and reduced quality may increase feeding on that front. The WASDE report is expected to show old-crop carryout at 1.113 billion, and new at 1.115 billion domestically, with world stocks at 274.6 million metric tons old crop, and 288.20 million of new.
The crop progress report showed condition unchanged for winter wheat at 64% good to excellent and 9% poor to very poor, with 83% headed vs. 91% average, and 4% harvested vs. 10% on average. Spring wheat has planting complete with 85% emerged vs. 93% on average, and 81% good to excellent, and 1% poor to very poor, down 2 percentage points.
On the July Kansas City chart, support is the 20-day at 4.44, with the 100-day at $4.55 as resistance.