Most U.S. grain futures finished higher Wednesday, led by a $7.40 gain in March soybean meal and 16 1/4-cent gain in March soybeans after NOPA reported a higher-than-expected soybean crush in January. March corn also finished higher with encouragement from Brazil’s currency, trading at its highest level in over a year.
Corn was seeing new highs for the move at midday, with soybeans providing spillover support.
Corn trade is 2 to 3 cents higher at midday with new highs for the day and move; momentum is flat to higher. Granted the daily range has only been just over a nickel, this is a significant day again. Higher highs and higher lows is an up trending market that attracts fund buying.
Basis has softened which has not had cash corn moving higher with the board therefore farmer selling has not slowed this slow upside advance the past week. Outside markets are lightly supportive.
The weekly ethanol production report was negative with production 1.42% lower on the week, stocks up 1.88% and gas demand down more than 5%. This has not been a good week for ethanol margins with the deep drop yesterday and follow-through today. The USDA announced 229,000 metric tons 229,000 metric tons sold to Japan.
On the March corn chart support is at the $3.70 10-day, then the $3.67 20 and 200-day. Resistance was at $3.76, which we are challenging at midday, then the $3.87 1/2 seven-month high.
Soybean trade is 12 higher on nearby and 7 higher on new crop at midday due to light outside market support and chart buying. Meal is up $4 and bean oil is flat to lower. Rains could return to Argentina this week with Brazil mixed as harvest moves on with isolated harvest disruptions. The firmer Real continues to limit Brazilian export competitiveness which has been supportive for near term US demand.
NOPA crush is expected to reflect strong usage for January despite mixed margins. The USDA announced 142,500 metric tons of soybeans sold to Mexico yesterday. These demand items have been supporting the futures overnight up to midday.
March beans have support at the 10-day and 20-day moving averages at 10.47. Resistance is at the $10.80 seven-month high.
Wheat trade is narrowly mixed at midday despite the spillover support from the row crops. Kansas City and Chicago are up a penny and Minneapolis is down a penny. This has the markets hanging onto the gains of the past week, which is positive.
The warm stretch will continue to raise concerns about breaking dormancy early, but better rains are expected for much of the belt to potentially ease some of the western dryness concerns. The dollar has moved back above 101 on the index, but remains in the lower end of the range since the election.
On the March Kansas City contract support is at the $4.52 200-day then the $4.43 20-day. Resistance is at the new high reached on Monday at $4.68 1/4.