Corn trade 2 cents lower; trade has seen a range of nearly 2 higher to 4 lower with March futures trading squarely in the middle of the $3.80s. After some initial strength, the limited buying was found to give us follow-through to the upside overnight.
The market is looking at a trading range with funds seemingly wanting to buy on breaks to balance positions with hedging interest noted on rallies. Ethanol margins remain range bound with the energy complex bouncing yesterday into today after the big drop off the past three weeks.
The chart has not turned but we have ethanol and unleaded around 2 cents higher at midday. The crude and energy spiked higher on the Iran news but then slipped to a three-month low on Monday, down approximately $13 a barrel from the high seen during the first week of January. The dollar is firming, so outside market resistance has kept corn from moving higher.
Corn basis should continue to react to day to day moves. On the March contract support is the lower Bollinger Band at $3.78 1/2 and then recent lows at $3.77, then the $3.71 4-month low, with resistance at the $3.94 recent 2 1/2 month high.
Soybean trade is 2 cents lower; meal is off $1.50 and bean oil is flat. Beans and corn seem to have some spreading activity going on as well as minor chart inspired positioning illustrated by the opposite moves yesterday into this morning, but now at midday they are both slightly lower.
South American weather is status quo for the most part which has the market, at this juncture in the growing season, feeling more comfortable with where production will be. So the soy market has priced-in that negative news, or taken out weather premium, this month with prices now 70 cents below the high seen at the beginning of the month. The Brazilian ral remains very cheap as well hurting U.S. export competitiveness.
Good crush margins should be offering support. The March soybean chart support is the $8.82 early December low, with resistance at the $9.11 10-day moving average.
Wheat trade is around a nickel to 7 cents lower at midday turning over on the chart with spillover weakness from corn, and the soybean weakness over the past three weeks. Cold threats remain limited for the Plains and now that we will be in February next week, the trade sees less chances for winter kill.
Kansas City is at an 87-cent discount to Chicago near the top of the recent range, while Minneapolis is back to a 25-cent discount. Russian values remain elevated with trade looking for confirmation of various milling grades to China in the short term. The March Kansas City chart support is the lower Bollinger Band at $4.71, and resistance is the 20-day at $4.87.
We are near a three-week low, with the March Kansas City 50-day at $4.52, then the 200-day at $4.58 the next level of support to point to since it appears this rally has or is turning over.
The U.S. stock market is firmer with the Dow up 88. The dollar index is 10 points higher. Interest rate products are firmer. Energies are mixed with crude down $0.20. Livestock trade is lower. Precious metals are narrowly mixed.