Corn futures are 6 to 7 cents lower at midday Thursday; soybean futures are narrowly mixed; wheat futures are 3 to 8 cents lower.
Corn futures are 6 to 7 cents lower at midday with flat spread action as trade holds onto a small inverse up front as we bounce back from an early test of support. Ethanol margins continue to deteriorate in the short term with better demand needed to put a dent in growing stocks. Trade will continue to look for further sales confirmation on the daily wire with China cancelling 380,000 metric tons (mt) of corn Thursday.
Weekly corn export sales showed a solid at 1.18 million metric tons (mmt) of new crop. Basis should remain rangebound to slightly weaker short in the term, especially at the processors with weather likely to slow short-term movement in some areas. Trade will continue watching South American weather as we head into second-crop planting and development, along with new-crop strength in soybeans to swing acres late.
On the March contract we have support at the 20-day moving average at $6.13, which we bounced from this morning, then the fresh high scored Monday at $6.42 1/2 as resistance.
Soybean futures are narrowly mixed with trade seeing broad two-sided action again, coming up just short of Wednesday’s high on strength, and bouncing back from early selling as well. Meal is .50 to 1.50 higher and oil is 20 to 30 points lower. Basis is expected to remain flat to weaker in the short term with weather slowing movement as well.
Crush margins weakened a bit Thursday as well, also likely to pressure the basis. Weekly export sales held up well at 1.1 mmt of old crop; 881,800 mt of new; 605,500 of old meal (marketing year high); -1,300 of new-crop meal; and 4,100 of oil. Early harvest is underway in South America, likely to further crimp U.S. export competitiveness in February with mixed, short-term weather for most.
On the March soybean chart, we have resistance at the fresh high at $15.64, with trade well above the 20-day moving average at $14.28 as support.
Wheat futures are 3 to 8 cents lower at midday with KC wheat leading as trade continues to work back to the lower end of the range with less support from the row crops and little fresh other bullish news. The dollar has faded back to the middle part of the range, which should add support.
Better cover should be in place over some of the Southern Plains after the winter storm with a bit of time until we exit dormancy. Fresh news from Ukraine and Russia remains limited as well. Weekly export sales were poor at 57,500 mt of old crop and 103,500 mt of new.
Spring wheat is flat versus Chicago, keeping the premium to $1.52 on the March, with KC at a 19-cent premium in firmer action. KC March chart resistance is the 20-day at $7.86, which we are fading back from, with further support the Lower Bollinger Band at $7.43.
The U.S. stock market is weaker with the Dow down 260 points. The U.S. Dollar Index is 65 points lower. Interest rate products are weaker. Energies are mixed with crude up .35. Livestock trade is mixed with hogs leading. Precious metals are weaker with gold down 3.00.