Weather concerns continued supporting the corn market Wednesday morning, but long-range weather forecasts released around noon suggested two weather systems could cross dry regions in Southern Brazil and Argentina next week, thereby potentially providing needed relief from current dryness. That very likely caused the late reversals suffered by the grain and soy complexes. Support associated with its 40 and 50-day moving averages (MAs) probably supported the March corn yesterday afternoon, but it apparently gave way in overnight trading. Technical factors seemed to undercut the market in early morning trading, since there little substantive news came to light. If bulls prove unable to halt the current slide quickly, March corn may test support around the psychologically important $7.00/bushel level in short order. March corn had slipped 4 cents to $7.16 3/4 per bushel in the early morning hours, while December fell 3 1/2 cent to $5.86 3/4.
The Wednesday afternoon shift in South American weather forecasts rather obviously undercut soybean futures as well. Indeed, given the widespread focus upon growing conditions in that region at this time, it would have been surprising if prices had not declined in response. The drop continued in Wednesday night trading, with Asian and European traders apparently having no wish to buck the short-term downtrend. However, while the overnight drop carried the nearby contract below its 40-day MA, it seemingly found support around the confluence of its 10 and 50-day MAs, which may bode well for the Chicago opening. March soybeans had fallen 12 1/4 cents to $14.24 3/4 in pre-dawn trading, while March soyoil dropped 0.33 cents to 51.70 cents/pound and March meal dipped $4.6 to $411.9/ton.
Although the Southern Plains region of the U.S. is expected to get little relief from the long-term dryness dominating weather conditions, wheat futures proved unable to fight the bearish tide that dragged corn and soybean prices downward Wednesday afternoon. That was also the case in electronic trading early Thursday morning, despite talk that severe Australian drought will undercut production prospects for its winter wheat crop to be planted in the second quarter. News that Japan had continued its recent wheat buying binge did not help much either. The March CBOT future may find support around its 20-day MA (at $7.67), but that seems a rather weak reed upon which to rely. March CBOT wheat had lost 3 1/4 cents to $7.71 1/2 as traders began arriving for the daily pit session, while March KCBT wheat slumped 4 cents at $8.26 1/4, as did March MGE futures at $8.56 1/2.