January soybeans closed up 9 cents Thursday, helped by talk that the U.S. and China are forming a plan to reduce tariffs and also by a decent showing of soybean export sales and shipments in Thursday’s weekly report. December corn and all three wheats finished lower, not expecting much help from Friday’s WASDE report.
Midday: Soybeans are flat at midday, corn and wheat lower.
Corn trade has broken to new lows with broad selling during the day session ahead of the WASDE report tomorrow, with trade 4 to 5 cents lower at midday. Harvest should make better progress this week with cold but open weather keeping the dryers going in the north rapidly becoming an issue with propane bottlenecks. Ethanol margins remain stable, with both corn and ethanol futures fading this week.
Basis should see more pressure as harvest progresses as we move to the back half nationally. South America should see areas of improvement as planting progresses. Weekly export sales remain poor at 487,900 metric tons. On the WASDE report tomorrow trade is looking for yields to come down about bushel to 167.5 BPA and total production at 13.643 billion bushels, and carryout at 1.817 billion bushels.
On the December contract support is the $3.71 lows from October, with resistance the upper Bollinger band at $3.78.
Soybeans are flat to 2 cents higher at midday with trade holding the lower end of the range on talk of a deal to phase out tariffs with China with buying still limited until something more official comes across. Meal is $1.00 to $2.00 higher and oil is 15 to 25 points lower, keeping crush margins stable. The real remains elevated but is a little softer again today.
Bean basis should see pressure start to fade. South America should make more progress through the week with improved weather, and Brazil moving past the halfway point of planting. The WASDE report is expected to show yield at 46.6 BPA, down slightly with production at 3.510 billion, and carryout at 428 million vs. 460 million last month. Weekly export sales were strong at 1.81 million metric tons, 262,400 of meal, and 3,800 of oil, with sales of 132,000 metric tons beans to China on the daily wire, and 136,000 of meal to Phillipines.
On the January chart support is the 200-day and lower Bollinger Band at $9.25 with the 20-day above the market $9.41.
Wheat trade is 2 to 3 cents lower with trade firming back from the early lows at midday with rangebound trade continuing with spillover pressure from corn. The Chicago/Kansas City December spread is 90 cents with wider action, and now about 10 cents from the recent highs.
The corn/hrw spread has widened back to 48 cents, working wheat out of rations. Russian values remain elevated with Australia dry, but the U.S. is still struggling to capture a larger share, with HRW movement the brightest spot so far. Weekly export sales remained rangebound at 360,600 metric tons. The WASDE report is expected to show carryout at 1.035 billion bushels.
The December Kansas City chart support is the 20-day at $4.24 which we remain just above then the lower Bollinger band at $4.10 below that with the upper Bollinger Band at $4.32 as resistance.