December corn closed up 8 1/2 cents Thursday as the market ignored USDA’s higher ending stocks estimate based on a suspicious estimate of 91.7 million acres of corn plantings. All three U.S. wheats posted double-digit gains after USDA’s estimate of world wheat production was trimmed lower.
Midday: Quiet trade ahead of the midday report.
Corn trade is narrowly mixed with choppy trade continuing in pre-report action. The crop looks to be heading towards pollination with mixed weather into mid-month as we try to catch crop development up with most short-term rain in the north and Western Corn Belt and potential tropical moisture.
Ethanol margins have remained rangebound with the bounce in the energy complex a boost for blenders with ethanol futures still holding $1.50. Harvest will continue to expand in South America, with Black Sea conditions mixed along with China. Basis remains very strong across a variety of areas, especially the East with intramonth spreads stable this week with September gaining this morning.
On the coming WASDE report, yield is expected to be 165 BPA vs. 166 last month, for production of 13.66 billion bushels using the recent acre numbers. The carryout for old crop is expected to be 2.173 billion bu., and new crop 1.642 billion. Weekly export sales remain soft at 505,936 metric tons of old crop, and -108,362 of new.
On the September nearby chart support is at the $4.18 50-day. Resistance is at the 10-day at $4.32 which we are just above, and then the 20-day at 4.42.
Soybean trade is flat to 2 cents higher with trade holding the midweek gains ahead of the report. Meal is mixed and oil is 5 to 15 points higher. Crush margins remain solidly positive overall with oil still holding the recent leadership position with meal rangebound. World export demand remains slow, with the real remaining near the upper end of the range and gaining ground this a.m., scoring new highs for the move. Weather is on the back burner for soybeans until we get deeper into the growing season for now.
The WASDE report is expected to show yields at 48.6 BPA, for production of 3.883 billion bushels. Old crop carryout is expected to be 1.038 billion bushels on old crop, and 812 million on new. Weekly export sales were soft at 132,163 metric tons of old crop, and 129,500 new crop, with meal at 44.935 metric tons old crop, 7,300 new crop meal, and 8,527 of oil.
The September chart support is the 100-day at 8.99, and resistance the 20-day at 9.05.
Wheat trade is flat to 3 cents lower with quiet pre-report action. The Kansas City/Chicago spread remains near highs with harvest pushing HRW feed usage, with Chicago gaining 2 cents ahead of the report. The corn/HRW spread got down to 2 cents before widening back to 6 cents, and steep cash discounts across the Plains remain in place.
The warmer weather should allow harvest to progress and move the home stretch, while Europe draws closer, and the Black Sea continues to see mixed yields with Russian estimates moving lower. The dollar is below 97 on the index with sell off post Fed Statement.
On the WASDE report, wheat carryout is expected to be 1.028 billion. The weekly export sales were soft at 284,370 metric tons.
On the September Kansas City chart support is the fresh low at $4.30, with resistance the 50-day at 4.50.