Grain trade has surged sharply higher this morning on positive renewable fuels news and some nervous short covering.
Corn trade is 9 to 13 cents higher at midday which has us around a nickel off the daily highs. Market strength developed shortly after the day session open with rumors spread about favorable changes for ethanol. Double crop planting in Brazil will continue to expand in coming days as the soybean harvest opens more acres up with limited weather issues at the moment.
Basis is expected to be weaker with the board gain. The warmer weather forecasted in the near term can get some early planting going in the southern US soon. On the ethanol front, talk that credits will be moved to producers along with broader E15 access has provided some longer term friendly news to the market.
On the May contract, trade is back above the highest moving averages at $3.76-3.77 levels which is chart support, the recent May high at $3.88 is chart resistance.
Soybean trade is 20 to 27 cents higher at midday with spillover support from corn and positive biodiesel developments, along with some nagging South American wetness. Meal is $4 to $5 higher, and oil 195 to 205 points higher. The Brazilian harvest should move past the 1/3 point this week and production expectations have not been slipping, with the ship line up lower than last year at this time.
Carnival will likely slow shipping in the near term. Soybean basis should remain flat with crush margins needing to improve to provoke improvement. The renewable fuels changes for biodiesel have the potential for better access and better producer tax treatment.
On the May soybean chart support is at the $10.41 50-day, with resistance the day high at $10.56 for now.
Wheat trade is 2 to 10 cents higher across the three contracts this morning with trade following row crops this morning. Ample supply continues to limit upside despite some growing weather concerns. The dollar continues to trade around 101 on the index, keeping us in the upper end of the range.
The winter wheat should continue to gain vs. the spring wheat with protein issues moving to the back burner for now, but it will remain a longer term issue. Warmer weather will continue to dominate the western plains with limited near term moisture.
On the May Kansas City contract support is at the $4.49 50-day. Resistance is the 10-day at $4.69.
The U.S. stock market indices are mixed with the Dow futures down 5 points. The interest rate products are higher. The dollar index is 25 points lower. Energies are mixed with crude down 0.70. Livestock trade is mixed. Precious metals are mixed with gold up 1.20.