Corn and beans are lower with some follow-through selling following the negative chart action and USDA numbers on Thursday.
Corn trade is 3 cents lower at midday, which has us at the low side of a slow 3-cent trading range since the start of trade last night. Outside markets are mixed with crude and the dollar lower. The March WASDE report left domestic carryout unchanged at 2.32 billion bushels, world stocks up 3.1 million metric tons to 220.7 mmt due to the Brazilian production estimate getting raised by 5 million to 91.5 million metric tons, and the Argentine production increased 1 mmt to 37.5 mmt.
This was not huge surprise, but was a negative fundamental surprise none-the-less. The chart action this week has been negative, most especially where we are right now at midday. Although trade is slow, it is significant.
December corn has its 200-day and lowest major moving average at $3.86 1/2, which we are just below here at midday. The May contract’s lowest major moving average is at the $3.66 100-day versus our $3.64 midday price, plus May futures are near the two-month low. This is just not a good chart look; this increases the chances for pressure from long liquidation this afternoon.
Soybean trade is 5 cents lower at midday, meal is off $1.50 and bean oil is off 35 points. The trading range has been a dime, and we are within 1 to 3 cents of the daily and two-month lows. The Brazilian harvest should continue to make progress with some weather disruptions as it passes the halfway point this week.
Soybean basis should remain flat to better domestically if the board continues to slip. Trade will be watching the spread vs. corn closer as April approaches.
The Monthly WASDE report raised domestic carryout 15 million bushels to 435 million based on slower exports, with world stocks at 82.8 million metric tons up 2.4 mmt from last month. Brazil was pegged at 108 million metric tons, up 4 mmt from last month, and Argentina was unchanged at 55.5 mmt.
Similar to corn, these were not large surprises, but a negative fundamental news surprise which appears to have turned the table to have the bears in charge of our trade Thursday into our action Friday.
On the May soybean chart, the $10.00 level is support, resistance is the 200-day at $10.20.
Wheat trade is mixed at midday with Minneapolis up 3, Chicago down 2 and KC down 3 cents. Weather will remain a concern with a cold snap ahead of a return to warm and dry weather after that. This is noted for the limited spillover pressure from the row crops Friday. In addition, the weaker dollar is lending support to wheat.
The WASDE report had domestic carryout at 1.129 billion bushels, down 10 million bushels from last month, with the world numbers at 249.9 mmt, up 1 mmt from last month; giving a mixed monthly USDA report. The weekly export sales were only 391,600 metric tons of old crop and 40,000 of new Thursday, which is not the type of weekly totals we need to help wheat move higher here.
On the May KC contract, support is at the 200-day at 4.69. Resistance is the 10—day and 20-day at $4.69-$4.81.
The U.S. stock market indices are quiet and higher at midday with the Dow futures up 9 points. The interest rate products are mixed. The dollar index is 55 points lower. Energies are lower with crude down $0.25. Livestock trade is mixed with cattle and feeders higher and hogs lower. Precious metals are lower with gold down $4.