DTN Grain Midday: Light Buying in Corn

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On-farm grain bin system. ©Debra L Ferguson

CORN

Corn trade is 2 to 3 cents higher at midday with light buying so far to start the week. Outside markets are neutral in quiet trade overnight.

On the report Friday, yield was 168.0 vs the average at 166.2 BPA, putting production at 13.692 billion bushels vs the average guess of 13.513 billion on 81.5 million acres vs. 81.35 expected, while stocks were at 11.389 billion, 121 million below expectations to put carryout at 1.892 billion vs. 1.91 billion last month, and 1.742 expected.

Ethanol margins remain tight, with corn and ethanol futures edging higher this a.m., with unleaded pullback. U.S. weather looks to be more active to the east in the U.S., allowing for more movement west for now, while South America remains mixed but with widespread issues short term. Basis has remained sideways.

Weekly export inspections remain soft at 460,307 metric tons. The USDA announced 137,000 metric tons of optional origin sold to South Korea. On the March contract support is the lower Bollinger Band at $3.82 with trade working just above the 20-day at $3.86 at midday.

SOYBEANS

Soybeans trade is 4 to 6 cents lower at midday with light selling as test support with little fresh bullish news for soybeans. Meal is $0.50 to $1.50 lower and oil is 20 to 30 points lower.

On the report, yield was 47.4 BPA vs the average guess at 46.6 BPA for production of 3.558 billion bushels vs. 3.512 estimated on 75 million acres, down 462,000 from average with stocks at 3.25 billion vs. 3.186 billion expected and carryout at 475 million bushels, unchanged from last month.

The export wire has remained quiet, with the real breaking lower today, hindering U.S. competitiveness. South American weather has the biggest holes in Argentina in the short term, with Brazilian coverage better to the north with CONAB raising crop size expectations slightly on their report.

Basis has remained firm at processors with the strong crush margins. Weekly export inspections improved to 1.136 million metric tons. The March chart support is at the 20-day at $9.43 which we are below at midday with resistance at the $9.58 upper Bollinger Band.

WHEAT

Wheat trade is 2 to 3 cents lower with choppy trade so far with overbought conditions, and early gains fading. On the report, acres of 30.804 million vs average guess of 30.664 million acres of winter wheat with Kansas City acres slightly lower, and Chicago 500,000 higher, 1.813 billon of stocks vs 1.917 billion bushels expected, and carryout of 965 million bushels vs. 969 million expected.

Cold threats remain limited for the Plains with most of the moisture staying to the east, with western cover remaining limited, while Russia has been warmer and drier than usual. Spread action is steady, putting Kansas City at a 71 cent discount to Chicago, while Minneapolis is back to a 5 cent discount.

Weekly export inspections were range bound at 473,960 metric tons. The March Kansas City chart support is the 20-day moving average at $4.72, with resistance the upper Bollinger Band at 4.99.

General Comments

The U.S. stock market is weaker with the Dow up 60. The dollar index is 2 points higher. Interest rate products are higher. Energies are lower with crude down $0.90. Livestock trade is lower. Precious metals are mixed with gold 7.00 lower.

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