July contracts of corn, soybeans and all three U.S. wheats traded lower Wednesday, falling back from recent highs after generous rallies. The September U.S. dollar index is trading lower, but was no help to Wednesday’s grain prices, after the Federal Reserve suggested there may be a rate cut ahead.
Trade is lower at midday, with corn bull spreading in play.
Corn trade is 1 to 4 cents lower at midday with trade seeing light bull spreading as choppy rangebound trade continues in the short term. The forecast looks to continue the recent pattern into the first part of the week, before potential pattern changes into the end of the month with warmer temps expected to boost growth from the weekend on.
The weekly ethanol report showed production down 15,000 barrels per day, with stocks down 189,000 barrels, with ethanol futures fading post report. Corn basis remains on a firmer trend.
On the July nearby chart support is the 10-day at $4.35, with the new high printed Monday at $4.64 resistance.
Soybean trade is 3 to 5 cents lower at midday with trade fading again as we remain just below the highs left on Monday. Meal is $2.50 to $3.50 lower and oil is 10 to 20 points higher. Crush margins remain solidly positive overall with oil strength the short term story. World export demand remains slow, and the South American currencies cheap but firmer early in the week.
Field work will likely be slowed again in many areas with more insurance days passing for soybeans before potential more open weather at the end of the month with trade trying to hold on to acres with November near the contract highs.
The July chart support is the 200-day at $9.07, with next resistance the $9.21 recent high.
Wheat trade is 4 to 9 cents lower at midday with harvest pressure pushing the winter wheats lower with little other fresh news. The Kansas City/Chicago spread is swing back to Kansas City this morning, narrowing by a couple cents. The heavy rains are slated more for the north and east parts of the winter wheat belt while harvest should build elsewhere, with heat expected to help push things along to the west.
The dollar moved back below 97 on the index as well with the feed expected to cut rates today. Black Sea area weather remains mixed with world values soft. 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.
On the July Kansas City chart, support is the 100-day at $4.51. with resistance again the 20-day at 4.59, which we are testing at midday.