Active futures prices of U.S. corn, soybeans, cattle and hogs were all higher Friday, boosted by official announcements of a phase one trade agreement between the U.S. and China. March wheat prices were steady to a little higher on a day when the March U.S. dollar index is trading modestly lower.
Corn is flat to 1 cent higher, soybeans are 4 to 6 cents higher and wheat is mixed.
Corn trade is flat to 1 cent higher at midday with support tied to the first phase of the China trade deal being approved, although details remain murky and we have pulled back from the overnight highs. Ethanol margins have narrowed, but futures have firmed along with the corn since midweek. Open weather should allow for more clean-up harvest, potentially.
Basis has held up well with some strength showing up at processors again, but firmer futures will likely limit further gains. On the March contract, support is the 20-day at $3.78 and holding at midday, with the lower Bollinger Band at $3.73 below that and resistance the upper Bollinger band at $3.83, which we tested overnight.
Soybean trade is 3 to 5 cents higher at midday with trade gapping higher on the trade news, but unable to hold the 15- to 16-cent higher trade we saw overnight with hard details likely needed to sustain buying. Meal is $1.00 to $2.00 higher and oil is 0.25 cent to 0.35 cent higher. The real remains cheap versus the dollar but is back at the high end of the recent range with Brazilian weather still in good shape and Argentina more mixed short term.
Bean basis has moved to a more sideways trend short term. January chart support is the lower Bollinger band at $8.66, which we are finally pulling away from, with trade the 20-day at $8.93, with the upper Bollinger band at 9.20 serving as resistance.
Wheat trade is flat to 4 cents lower. Trade is fading along with the row crops while KC scored a new high for the move before pulling back. The Chicago/KC March spread is back to 86 cents narrowing from the high with Chicago gaining a little at midday. Chicago is also holding a 5-cent premium to Minneapolis, which has widened Thursdsay 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. The March KC chart support is the 20-day at 4.34, which we jumped above yesterday, with resistance the upper Bollinger band at $4.48, which we tested before fading.