DTN Grain Close: Bullish Surprise in Wheat

March KC wheat has been quietly sideways for almost two months, but rallied 12 cents on Thursday’s close with no obvious bullish explanation for the move. On a day when President Trump and several media sources are suggesting a limited trade agreement with China is near, January soybeans were up 4 3/4 cents and March corn was up 6 1/2 cents.

 

Midday: Corn futures are 6 to 8 cents higher; soybeans are 4 to 6 cents higher; wheat is 9 to 14 cents higher.

CORN

Corn futures are 6 to 8 cents higher with good buying during the day session, reversing Wednesday’s losses with support from the fifth largest export sale on record hitting the daily wire with 1.6 million metric tons (mmt) heading to Mexico, with two-thirds of that as old-crop sales.

Ethanol margins have narrowed with the stocks build reported Wednesday and firmer corn Thursday, with ethanol futures able to edge higher this morning, while blenders remain in a strong position. Open weather should allow for more clean-up harvest. Weekly export sales were better at 873,500 metric tons (mt). Basis has held up well with some strength showing up at processors again.i

On the March contract, support is the fresh low at $3.71 1/4, with the contract lows at $3.66 below that, with the 20-day at $3.78 resistance, which we are testing at midday.

SOYBEANS

Soybean futures are 3 to 5 cents higher with trade struggling to clear the $9.00 area with seasonal pressure helping to cap gains ahead of a big weekend for trade. Meal is flat to $1.00 lower, and oil is 60 to 70 points higher. The real remains cheap vs. the dollar with Brazilian weather still in good shape; Argentina is more mixed, short term. Bean basis has moved to a more sideways short-term trend. Weekly export sales were mixed at 1.05 mmt of beans, 238,600 mt of meal, and 30,000 of oil.

January chart support is the lower Bollinger band at $8.65, which we are finally pulling away from, with trade just above the 20-day at $8.93, with the upper Bollinger band at 9.21.

WHEAT

Wheat futures are 9 to 14 cents higher with the winter wheats catching a bid during the day session with support from world values along with short covering. The Chicago/KC March spread is back to 86 cents, narrowing from the high, with KC gaining sharply the last two days before flattening Thursday. Chicago is also holding a 5-cent premium to Minneapolis, which has widened Thursday after sharply contracting. The dollar remains rangebound.

Export business remains quiet with Russian values rising again and some midweek tenders. The forecast has some moisture for Kansas along with warmer temps. Weekly export sales showed improvement at 502,700 mt.

The March KC chart support is the lower Bollinger band at $4.22, and resistance the 20-day at 4.34, which we are above at midday.

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