After moving sharply higher Tuesday on optimism regarding China, new export sales and corn’s new-found competiveness, markets fell on Wednesday as soybeans nor pork were on China’s tariff relief list, and U.S. corn lost a chunk of South Korean corn and meal business to cheaper South American offers.
Corn is 2 cents lower, soybeans are 6 to 7 cents lower, and wheat is 1 to 5 cents higher. In outside markets stocks are higher, the U.S. dollar is higher and crude is lower.
Corn futures are 2 cents lower at midday. Trade has been two-sided from around 2 cents higher to nearly 5 cents lower earlier this morning. Crop ratings gave us strength on Tuesday, but weather remains a short-term non-issue with warm temps and some rains.
Corn basis remains firm but did weaken in some areas on the firmer board on Tuesday. The trade seems optimistic but trade issues and poor ethanol margins continue to weigh on bullish arguments.
On the December contract support is at the $3.52 1/4 low printed Monday with resistance at the $3.67 20-day moving average then the $380 upper Bollinger Band.
Soybean futures are 6 to 7 cents lower at midday with flat momentum; meal is down $3.50 with bean oil up 25. The market has given back some of the Tuesday gains.
On the chart, we are flirting on both sides of the 10- and 20-day moving averages on Wednesday. The low printed Monday was a 3-month low; the action Tuesday and so far Wednesday has been that of limited selling interest below the three-month low. Crush margins remain positive overall. The positive export story needs China. Bean basis remains flat overall. South American currencies remain weak as planting season draws closer.
On the November chart, we are on the 10-day moving average support level at $8.66 with next support down at the $8.55 lower Bollinger Band, then the $8.51 three-month low. Resistance is at the $8.80 upper Bollinger Band.
Wheat futures are 1 to 5 cents lower with trade not able to extend the gains seen on Tuesday; momentum seems flat at midday, not negative. The KC/Chicago spread is at 76 cents, towards the top of the recent range but coming off a test of the highs Tuesday.
The corn/HRW spread is tight, hanging around the 40-cent area. KC wheat is competitive on the world market but we need to see business from more buyers to move the board out away from our lows. Spring wheat harvest is down to the last 25% so market bulls argue we have set the harvest lows at this juncture.
The December KC chart support is at the 10-day at $3.96, with resistance at the upper Bollinger Band at 4.13.