DTN Midday Grain Comments

General Comments

The U.S. stock market indices are lower with the Dow futures down 70 points. The interest rate products are lower. The dollar index is 15 higher. Energies are mixed with crude up 0.60. Livestock trade has cattle limit lower, and hogs modestly lower. Precious metals are higher with gold up $1.40.

CORN

Corn trade is near the daily highs at midday, but sitting 4 to 5 cents lower at midday. A 4 cent gap was left with initial pressure last night and we were down around 9 cents. The weekly export inspections were decent at 935,262 metric tons which limited downside. The USDA announced 135,000 metric tons of corn sold to unknown for new crop this a.m. Cooler near-term forecasts and some rains over the weekend were noted for the gap lower open. Corn pollination will continue with cooler temperatures after the next couple of days but rain coverage remains less than ideal for the much western belt. There are spots of excessive moisture in areas of the east. Ethanol production margins are benefited from the decline in corn. The weekly crop progress report is expected to show steady to slightly lower conditions, with maturity near normal. On the December chart support is at the July low of $3.81 3/4 with resistance at the 100-day at $3.90 then the 20-day at $3.94.

SOYBEANS

Soybean trade is 14 cents lower at midday after trading nearly 25 cents lower overnight. Meal is $4.50 lower and soybean oil is down 25 points. Cooler temperatures with some moisture was viewed as less threatening for the coming weeks; this had beans lower but there was no big interest in selling new crop beans below $10. We still have six important weeks of weather ahead for beans. The western belt will likely see the most stress going into August with rains limited. Market bears hope for more Gulf moisture to make its way into the western belt and High Plains. The weekly crop progress report is expected to show a slight decline in conditions with maturity remaining slightly ahead of normal. The weekly export inspections were okay at 596,620 metric tons. China is expected to remain active in securing fall supplies on breaks. On the November chart support is at the 20-day at 9.89 with resistance at the 10-day at 10.13.

WHEAT

Wheat trade is around 10-12 cents lower on Kansas City and Chicago with Minneapolis down 30 cents. Minneapolis has been down over 40 cents with corrective action still occurring following the $3 rally from mid-May to early this month. The spread trade remains active with Minneapolis still $2.50 over Chicago. The September spread was trading around $1 over in early May, then traded to nearly $3 over on July 5. The weekly export inspections were ok at 451,665 metric tons. Most world export business remains focused on the Black Sea area as harvest begins to progress there, with the dollar around the yearly lows there is hope for export U.S. improvement but world supplies remain ample. Australia continues to see dryness raising a production concern in addition to the spring wheat issues here. The Spring wheat tour will go out this week, which should provide further guidance with trade acting as if much of the issues are priced-in. The weekly crop progress should show winter wheat harvest past 85%, with spring wheat conditions steady to slightly lower, and maturity ahead of normal. On the December Kansas City contract support is the 50-day at $5.10, then the 100-day at $4.94. Resistance is at the 10-day at $5.39 then the 20-day at $5.44.

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

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