November soybeans closed up 8 3/4 cents Friday, helped again by a 0.57 cent gain in December soybean oil. The rest of the grain sector was mixed ahead of Monday’s WASDE report with December corn down 0.50 cent and September Chicago wheat up 1 cent.
Midday: Early gains fade into mixed midday action.
Corn trade is flat to 1 cent lower with trade fading back from a test of the $4.25 area. Cooler weather and mixed rain amounts look to continue short term with the extended forecast warmer and drier again. Ethanol margins remain poor with the firmer energy complex helping to stabilize the recent ethanol futures break with futures crawling back to the 1.44 area.
Basis has firmed again in some areas with the spread mostly sideways. Looking ahead to the report on Monday, trade is looking for an old-crop carryout of 2.392 billion bushels on old crop, and 1.632 billion on new, with yield at 164.9 BPA, on a wide range of acres with an average guess of 87.9 million.
On the September nearby chart, support is the 10-day and 100-day at $4.06-7 and then the 200-day at $4.00. Resistance is at the 20-day at $4.17, which we tested before fading.
Soybean trade is 2 to 3 cents higher with support from weather, while trade issues continue to hang over the market. Meal is flat to 1.00 lower and oil is 30 to 40 points higher with oil taking more of the lead in the complex with reduced meal demand limiting oil supplies. World export demand remains slow, with the US disadvantage persisting on the currency markets, with South American prices supported ahead of planting.
Weather will come into focus more as we head towards August and pod fill season with immediate stress looking more limited with the expected cool down and dryness an issue in some areas. Expectations for the report have an average carryout guess of 1.065 billion bushels of old crop, and 821 million of new, with acres at 81 million and 47.6 BPA yield.
The September chart support is the 10-day at 8.66, with the lower Bollinger Band at $8.45 below that, with the next level of resistance the 20-day at 8.80.
Wheat trade is narrowly mixed with Chicago trade breaking through the $5.00 area while the higher protein wheats lag on the spread trade. The KC/Chicago spread has made new highs at 83 cents, with a 20 cent swing the last three sessions. The corn/HRW spread is back to 6 cents. Chicago Sep-Dec has widened slightly.
Winter wheat harvest is entering the final stages with spring wheat still a little off from hitting full swing with South Dakota rains slowing things in the short term, while Europe and the Black Sea continues to make progress with Matif Milling wheat trying to find a bottom as well.
On the report, carryout is expected to be 999 million bushels. The September Kansas City chart, support is the recent low at $4.10 1/4 with the first resistance the 10-day at 4.23, with the 20-day at 4.30 the next round up.