Early on Friday’s first notice day for September futures delivery, news that Cargill had delivered 2.2 million bushels of hard red winter against the typically soft red wheat contract (Chicago September) sent futures plummeting to large losses. Kansas City joined in on the bearish move as a greater-than-expected 1,000 contracts were delivered in Kansas City’s futures market. Soybeans showed independent strength early on renewed hopes of a U.S.-China trade meeting soon, but faltered late.
Corn is 1 to 2 cents higher at midday with December now the front month, and light buying with trade trying to end the month on a positive note. Weather should continue to remain a short-term non-issue with continued cool weather the biggest concern at this point as we move towards September.
Ethanol margins remain poor but have been stable this week, with hints of presidential action on the recent waivers with announcement expected in September, but trade will likely remain in show-me mode with futures edging lower this morning. Basis remains mixed to firmer overall with harvest getting closer but still too far away in some areas.
On the December, nearby chart support is likely the $3.64 1/4 low with the lower Bollinger Band at $3.45 below that with resistance the 10-day at $3.70, which we are just above at midday, with the 20-day the next round up at $3.83 1/2.
Soybean trade is 8 cents to 1 cent higher at midday with improving short-term technical action and improved trade optimism. Meal is narrowly mixed, and oil is 20 to 30 points higher. Crush margins remain positive overall, with oil staying towards the upper end of the range, and meal finding support at $289.
Basis remains flat overall. The Brazilian ral has continued to grind lower with local prices rising as stocks tighten and dry conditions are in place ahead of planting season. The weather looks to be a short-term non-issue for soybeans as well, coming forward with maturity remaining the biggest concern.
November chart support is the lower Bollinger Band at $8.54, with the next round up the 10-day $8.67, which we closed above yesterday, with the 20-day just above the market at $8.72, which we are above at midday, then the upper Bollinger Band at 8.90.
Wheat trade is 3 to 11 cents lower, with deliveries adding pressure to the front months and December trade more sideways and the higher protein wheats gaining. The Kansas City/Chicago spread is at 65 with Kansas City gaining sharply this morning. The corn/HRW spread is narrower, back to 25 cents.
Kansas City wheat is now back to competitive on the world market trading as well as into feed rations, with corn gaining well this week. Spring wheat harvest is trying to play catch-up with the slow start in the Northern Hemisphere. The dollar remains near the upper end of the range, with choppy trade ongoing.
The December Kansas City chart support is the new low at 3.92 with the first resistance the 10-day at $4.03 which we are just below, and the 20-day at $4.12.