July corn fell 10 3/4 cents to its lowest close in three months, pressured by this week’s favorable weather outlook for crops. Soybeans and winter wheat posted declines of nearly 20 cents after weekend trade talks with China failed to show progress and world wheat crops appear to be doing well overall.
Midday: Trade is sharply lower at midday on a combination of negative items.
Corn trade is 8 to 9 cents lower at midday with trade testing major support with widespread selling corn, beans and wheat to open the week. Chart selling along with China trade news bias and a neutral to negative weather bias are all noted for the lower trade. Warm weather should continue with most of the belt seeing some rain this week.
The second crop areas of Brazil are getting closer to the end of the growing season. Ethanol margins are stable this with crude and ethanol futures drifting lower with ethanol close to a dime from the recent highs with corn slipping.
The weekly export inspections remained strong at 1.55 million metric tons. The weekly crop progress is expected to show planting effectively complete, emergence ahead of normal, and conditions remaining very good.
On the July chart we have slipped below the 100-day at 3.86 this morning, with the 200-day below that at $3.82 holding as major support. Overhead resistance is the 50-day moving average at $3.96.
Soybean trade is 11 to 15 cents lower at midday with trade pulling back to the lower end of the range on improved weather and continued trade concerns. Meal is $2 to $3 lower and oil is 30 to 40 points lower.
Crush margins have narrowed but remain positive, with meal drifting back towards the $370 area. Basis has remained steady, with trade likely to remain quiet in the near term.
Strikes and turmoil continue in Brazil which we help to offset their cheaper currency, but strides have been made with US trade concerns coming back to the forefront.
The USDA announced 134,000 metric tons of new crop sold to Mexico. The weekly export inspections were in line with recent weeks at 557,733 metric tons. The weekly condition report is expected to show planting and emergence well ahead of normal.
On the July chart, trade is back below all the major moving averages with the 200-day at 10.18 the first level of resistance with support the lower Bollinger Band at 9.93 1/4 as support.
Wheat trade is 7 to 17 cents lower with broad weakness and early harvest offsetting Black Sea issues and the weaker dollar this morning. Warmer weather should allow early harvest to progress quickly with the lagging maturity catching up with the continued warm weather.
Spring wheat should see better progress with warmer weather helping to catch up emergence, with Canada remaining on the dry side, along with cooler than normal weather in the spring wheat areas of Russia. Australia is expected to see better short term rains. Black Sea values are at $208.00 a ton with world supplies remaining ample.
Weekly export inspections were in line with recent weeks at 341,470 metric tons. The weekly condition report is expected to be steady with maturity almost back to normal, with spring wheat planting wrapping up with emergence still playing catch up after the slow start.
On the July KC contract support is the 50-day at 5.24 which we are testing at midday, with the next level of support the 100-day at $5.13, with resistance at the 20-day at $5.34.