Corn, soybeans and all three wheats posted double-digit gains Friday with subfreezing temperatures threatening to end growing seasons across much of the Midwest, while rumors circulate that the U.S. and China may be close to reaching a limited trade agreement.
Midday: Trade is sharply higher at midday across the board.
Corn trade is 12 to 14 cents higher at midday with support from weather and trade after holding support in the post-report selloff yesterday with the report losses reversed. Harvest will remain slow with the cold front moving through. The ethanol margins have improved this week with broader harvest needed to support production levels, with ethanol futures edging higher today. Basis remains flat to weaker with anticipation of more inbound bushels soon. South American corn planting is underway, with second-crop shipments out of Brazil remaining active.
The WASDE report raised yields 0.2 BPA to 168.4, vs. 166.8 expected, with production at 13.779 billion, down slightly from last month on reduced harvested acres, and carryout at 1.929 billion down from 2.19 last month vs. expectation of 1.682 billion. On the December contract support is at the 10-day at $3.88, and resistance the upper Bollinger Band at 3.99.
Soybeans are 11 to 13 cents higher at midday with support from report numbers and reported trade progress supporting the market. Meal is 3.50 to $4.50 lower and oil is 10 to 20 points higher. Crush margins remain good. Economically US export competitiveness remains improved, but remains at a steep currency disadvantage to South America with more China buying possible with the trade deal. Bean basis is seeing some pressure from expanded harvest through midweek but pace will likely slow again. South America has the beginnings of planting but remains behind the normal pace so far.
The WASDE report was supportive with yields down 1 BPA from last month at 46.9 vs expectations of 47.2, and carryout at 460 million bushels vs. 640 last month, and 497 expected, on production of 3.55 billion vs. 3.63 billion last month. On the November chart support is the 200-day at $9.10 with the upper Bollinger band remaining resistance at $9.36, the upper Bollinger band, which we are testing this morning.
Wheat trade is 10 to 19 cents higher with Chicago trade leading at midday with spillover from the row crops adding support along with aggressive short covering. The Chicago/Kansas City December spread is 93 cents with choppy action continuing with Kansas City and Chicago taking turns leading. Remaining spring wheat harvest will likely be stopped with the incoming cold front. The corn/hrw spread has widened back to 24 cents from 13 cents at the low this week working wheat back out of rations. Export action continues to be dominated by Black Sea origin.
The WASDE report showed carryout at 1.043 billion bushels, up from 1.014 last month, and vs. 1.01 expected. The December Kansas City chart support is the $4.07-4.09 area where the 10,20, and 50-day moving averages are clustered with the upper Bollinger Band at 4.16 as resistance which we are testing at midday.