Soybean futures started off on the right foot Thursday ahead of the September USDA and WASDE report, with the November up 17 cents prior to the report release. Buyers came back into the soy complex on indications that the U.S. and China were closer to settling trade differences. An unconfirmed report just before noon indicated that China bought 600,000 mt of U.S. soybeans on Thursday, sending beans skyward.
Corn is 2-3 cents higher at midday Thursday, soybeans are 18 to 20 cents higher, and wheat is 1 to 3 cents higher. In outside markets stocks are higher, the dollar weaker and crude lower.
CORN
Corn futures are 2 to 3 cents higher at midday Thursday with trade moving just below resistance levels in pre-report action. Weather remains a short-term non-issue with warm temps and some rains. Corn basis remains firm, but did weaken in some areas on the firmer board through midweek. The trade seems optimistic but trade issues and poor ethanol margins continue to weigh on bullish arguments.
Ethanol production was up slightly on the week, along with stocks being drawn down, keeping futures flat. Weekly export sales were mediocre at 498,100 metric tons (mt). The report is looking for old-crop stocks of 2.401 billion bushels (bb), and new crop at 2.002 bb, and yield at 167.2 bushels per acre (bpa).
On the December contract, support is at the $3.52 1/4 low printed Monday with resistance at the $3.67 20-day moving average, then the $3.80 upper Bollinger Band.
SOYBEANS
Soybean futures are 17 to 20 cents higher at midday Thursday with trade optimism helping boost soybeans overnight with tariff delays, along with pre-report positioning. Meal is $4.00 to $5.00 higher, and oil is 20 to 30 points higher. Crush margins remain positive overall. The positive export story needs China coming forward as U.S. export competitiveness improves.
Bean basis remains flat overall. South American currencies remain weak as planting season draws closer. Weekly export sales were strong at 1.17 million metric tons (mmt) of soybeans, 38,000 mt of old meal, 81,100 of new meal, and 10,800 of oil. On the report, trade is looking for yield at 47.2 bpa with old-crop carryout out at 1.052 bb, and 660 mb of new crop.
On the November chart, we are solidly above the 10-day moving average support level at $8.66, with next support down at the $8.55 lower Bollinger Band, then the $8.51 3-month low. Resistance is at the $8.80 upper Bollinger Band, which we are above at midday.
WHEAT
Wheat futures are 1 to 4 cents higher at midday Thursday with trade following the lead of the row crops in quiet action after failing to extend the Tuesday gains on Wednesday. The KC/Chicago spread is at 80, back at the high end of the range. The corn/HRW spread is tight, hanging around the 40-cent area. KC wheat is competitive on the world market but we need to see the business.
Spring wheat harvest is down to the last 25%, so market bulls argue we have set the harvest lows at this juncture. Weekly export sales were good at 610,900 mt. The report is expected to show stocks at 1.016 bb.
The December KC chart support is at the 10-day at $3.96, with resistance at the upper Bollinger Band at 4.13.
