Friday’s trading in grains was dominated by China’s announcement of a new tariff on $75 billion of U.S. goods and by concerns as to how the U.S. will respond. Not only were November soybeans 12 1/4 cents lower and December corn 3 1/4 cents lower, most other commodities and U.S. stocks were also trading lower.
Midday: Broad selling at midday except for wheat.
Corn is 3 to 4 cents lower with choppy trade continuing amid fresh intensification of the trade war. Weather should continue to remain a short-term non-issue with continued cool weather the biggest concern at this point.
Ethanol margins remain poor with blenders in the best position currently, with more plants likely to be idled with rumors of the refinery waivers to be reversed again refuted. Basis remains mixed overall with harvest getting closer.
On the September nearby chart support is likely the $3.57 1/2 low with the lower Bollinger Band at $3.47 below that with resistance the 10-day at $3.65.
Soybean trade is 8 to 11 cents lower with early buying disappearing again with trade slipping further into the lower end of the range amid the trade war intensification. Meal is 2.00 to 3.00 lower, and oil is 15 to 25 points lower. Crush margins remain positive overall, with oil staying towards the upper end of the range, and meal finding support at $2.90.
Basis remains flat overall. The Brazilian real is at the lows again with the dollar strength, ensuring strong prices to domestic producers there, even with the midday dollar reversal. The weather looks to be a short-term non-issue for soybeans as well coming forward. The trade situation remains little changed as well.
September chart support is the lower Bollinger band at $8.41, with the next round up the 10-day $8.61 which we tested again today.
Wheat trade is narrowly mixed at midday with trade seeing light choppy action after the strong finish yesterday. The Kansas City/Chicago spread is at 78 after a high of 90 cents last week and a low of 71 cents this week with Kansas City gaining slightly overnight. The corn/HRW spread is wider, back to 31 cents.
Kansas City wheat is now back to competitive on the world market trading as well as into feed rations, although that has faded in recent days. Spring wheat harvest should expand with winter wheat just about wrapped up, with Europe progressing as well. The dollar remains near the upper end of the range, limiting upside potential.
The September Kansas City chart support is the new low at 3.80 3/4 with the first resistance the 10-day at $3.89 which we are just above at midday, and the 20-day at $4.06.