Soybeans continued their mini-bounce from very oversold conditions, as the back-and-forth chatter about the U.S.-China trade deal took a more optimistic turn Tuesday night. Following President Donald Trump’s dire warning that a deal with China might not occur until the next election, a Bloomberg news story suggested that the two sides are much closer to a partial agreement. Corn is weak on ideas that Brazil corn planting is pegged at a record-large 18 million hectares, and that much-needed rain is slated to move into Argentina next week.
Soybeans lead mixed trade at midday.
Corn trade is 3 to 4 cents lower with trade failing at resistance at $3.82 yet again, with spread unwinding vs. soybeans adding pressure at midday. The weekly ethanol report showed production up 1,000 barrels per day, with stocks 362,000 barrels higher and stocks are slightly lower.
Basis has held up well with the slow pace of harvest so far with another storm stopping remaining harvest for now, but warmer weather will return for many into midmonth. South America should see areas of improvement as planting progresses, with a drier week in Argentina expected through the weekend.
On the March contract support is the lower Bollinger Band at $3.74, with resistance the 20-day at $3.81 which we failed again at.
Soybeans are 6 to 8 cents higher with the pattern of overnight strength still intact, while we wait to see if trade can sustain during the day session after finally holding on to a positive session yesterday with good progress at midday. Meal is 2.00 to $3.00 higher, and oil is 10 to 20 points higher.
The real remains cheap vs. the dollar although slightly firmer overnight with the export wire seeing 20,000 metric tons of oil to Morocco. Bean basis has moved to a more sideways trend short term with pockets of firmness showing up on the break.
The January chart support is the lower Bollinger Band at $8.62, which we are finally pulling away from, with resistance well above the market at $9.03 where the 20-day moving average, along with exceptionally oversold conditions starting to ease.
Wheat trade is 1 cent lower to 3 cents higher with the Kansas City trade leading over at midday after the higher protein wheats gained solidly vs. the Chicago yesterday and today.
The Chicago/Kansas City March spread is back to 86 cents. Chicago also holding a 9 cent premium to Minneapolis which has narrowed sharply this week. The dollar remains rangebound but is starting to shift lower again. Export business has been quiet so far this week. The forecast dries the Plains back out short term, with the Black Sea seeing better short-term action, while Australia’s crop is estimated to be off about 20% on the year.
The March Kansas City chart support is the 20-day at $4.35, and resistance the upper Bollinger Band at $4.47.