December KC wheat closed up 16 cents Tuesday, posting a new three-month high after cold morning temperatures invaded the southwestern U.S. Plains and prompted short-covering among bearish noncommercials. December corn was up 4 1/2 cents and January soybeans ended unchanged ahead of Tuesday afternoon’s harvest update from USDA.
Midday: Kansas City wheat is the midday leader, with the rest of the grains firming.
Corn trade is 2 to 3 cents higher with trade working to hold the lower end of the range, and to find some buying amid oversold conditions with support from wheat. Harvest will be slowed the first part of the week with the cold front bringing some snow before opening up again the second part of the week with much of the areas south of 1-80 nearing the finish line and above-normal temps for most to close the week.
Ethanol margins remain stable, with ethanol futures flat, helping to support blenders with unleaded still near the recent highs. 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, especially in Brazil. Weekly crop progress should show harvest near 2/3rds complete nationally, and export inspections showed improvement to 560,105 metric tons.
On the December contract support is the $3.71 lows from October, with resistance the spike high from Friday at $3.83 3/4.
Soybeans is flat to 1 cent higher with trade chopping around at midday after the heavy selling to start the week with the improved South American weather, and trade concerns with the Hong Kong flare up along with oversold conditions. Meal is flat to $1.00 higher, and oil is 30 to 40 points lower. The real has surrendered all of the recent gains again after the release of former President Lula, hurting U.S. competitiveness, with the expectation of greater short-term sales out of Brazil.
Bean basis should see pressure start to fade with quiet action to start the year. South America should make more progress through the week with improved weather, and Brazil heading towards the planting homestretch.
Weekly export inspections remain strong at 1.331 million metric tons. Weekly crop progress should show harvest past 80% complete. On the January chart support is $9.00 after trade broke below the lower Bollinger Band at $9.18 this Monday.
Wheat trade is 4 to 8 cents higher with Kansas City leading again this morning as trade has bounced off another test of support to start the week, with Chicago finding strong buying during the day session as well. The Chicago/Kansas City December spread is 83 cents with narrower action, but bouncing back from a multi-week low scored this a.m.
The corn/HRW spread has widened back to 56 cents, keeping wheat out of rations. Russian values remain elevated with Australia dry, but the U.S. is still struggling to capture a larger share, with the dollar remaining at the upper end of the range. Weekly export inspections improved to 528,875 metric tons. Weekly crop progress should show steady conditions, with planting almost complete and emergence lagging.
The December Kansas City chart support is the 20-day at $4.23, which we are just above overnight then the lower Bollinger Band at $4.15 below that with the upper Bollinger band at $4.32 as resistance which we have tested this a.m.