DTN Midday Grain Comments

General Comments

The U.S. stock market indices are lower with the Dow down 65 points. The interest rate products are mostly higher. The dollar index is 48 points higher. Energies are weaker with crude down 0.55. Livestock trade is mixed with cattle lower and hogs firmer. Precious metals are lower with gold down $7.20.

CORN

Corn trade is 5 cents lower at midday making new contract lows again after early two sided trade evaporates again. Ethanol margins have improved with ethanol futures stable to firmer with the cheaper corn helping along with the end of summer driving season. Corn basis will remain on the defensive as harvest approaches with the last on farm bushels moving to town. The weekly conditions and progress report had corn unchanged at 75% good to excellent, 7% poor to very poor, with 92% in the dough, 87% on average, 60% dented vs. 52% on average, at 9% mature vs. 11% on average. The crop is generally a bit ahead of normal with warmer temps in much of the belt keeping things moving. On the chart, resistance is in the area in between the 10-day and 20-day moving averages at $3.34 - 3.36, then the $3.44 1/4 August high. The fresh contract low of $3.15 3/4 is December support after the old low at $3.18 failed this morning. Nearby September hit $3.05 so we are a nickel away from seeing a 2 in front of corn. The large crop and upcoming harvest only has end users cautiously scale down buying at this juncture.

SOYBEANS

Soybean futures found broad selling this morning after flat overnight trade, with action 15 to 20 lower at midday. Meal is $5.50 to $6.50 lower and oil is 40 to 50 points lower. Good to excellent ratings improved 1 percentage points to 73% good to excellent and 7% poor to very poor. 94% were setting pods vs. 92% on average, and 5% were dropping leaves, same as average, helping to keep pressure on. Trade will be watching for further export sales this week with a Chinese delegation visiting to secure fall needs with another 126,000 metric tons announced as sold to unknown. Wetter weather in much of the belt should help trade to finish out. On the November soybean chart support was at the $9.60 low from Friday with the 200-day at $9.66 above that; longer-term support is the $9.30 area from April.

WHEAT

Wheat trade is flat to 6 cents lower with early light short covering dissipating when the row crops turned lower. Spring wheat will continue to see harvest pressure with ample supply weighing on all classes with the fresh lows made Monday with harvest 81% complete vs. 62% on average, although spring wheat is showing the most strength today. Canadian harvest will be hitting full stride soon, and Russia looks to continue an aggressive export pace with ongoing issues in Egypt causing problems. On the Kansas City December chart, support is now the $3.97 low from this morning, with trade well below the nearby moving averages. Chicago has printed a new contract low for the fifth day in a row, which Kansas City holding back above Chicago values.

David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered trading adviser.
David Fiala can be reached at dfiala@futuresone.com
Follow David Fiala on Twitter @davidfiala

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