DTN Midday Grain Comments

General Comments

The U.S. stock market indices are higher with the Dow futures up 74 points. The interest rate products are higher. The dollar index is 22 higher. Energies are lower with crude down 030. Livestock trade is lower. Precious metals are mixed.

CORN

Corn trade is at the daily low at midday sitting 4 cents lower; trade was mixed overnight and this morning but with widespread rain coming across the western belt the bears are in control. December hit a new 2017 low at $3.64 1/4 a short while ago, so we are 53 cents off the contract high printed just 5 weeks ago. Long liquidation this afternoon and this week could help accelerate downside. The weaker corn is pulling ethanol down with production hedging. The weekly EIA report had production up 4.64%, stocks 2.25% higher even with gas demand off 2.81%. On the December chart support is the new low for the move at $3.64 1/4 which is the new low for the move and the lower Bollinger Band. Resistance is at the 10-day moving average at $3.77.

SOYBEANS

Soybean trade is 1 to 2 cents lower at midday in slow trade, bean oil is up 10 limiting downside in beans. Outside markets are mixed, weather is viewed as negative but pressure is light due to November futures already down around $9.20. There is also still some disagreement on the extended forecasts. Good rains and near normal temperatures in August is good for bean yields. China will be watched for more follow up buying with the weakness to start the week with another 132,000 metric tons announced this a.m., along with 132,000 to unknown for new crop. Good demand is the argument of market bulls and rightfully so with trade watching for more on the daily wire. NOPA crush for July was 144.72 million bushels, just above expectations. So demand news remains good. On the November chart support is at the fresh low for the move at $9.21, then the one-year low printed in June at $9.07. The 10-day moving average at $9.50 the first level of resistance.

WHEAT

Wheat trade mixed with Minneapolis up a dime and Kansas City/Chicago down nearly a dime. It is a sad day for any wheat bulls with both Kansas City and Chicago slipping to new contract lows. The trend of growing global supplies has not been broken; lower prices economically discourage production and encourage greater usage. This is what the market is doing. The poor spring wheat production year is expected to keep Minneapolis firm versus Chicago or Kansas City and just stay volatile. The dollar strength today is negative wheat. The Russian harvest is moving along with strong yields but logistics will remain the limiting factor. Egypt is actively seeking wheat again, along with Venezuela securing Russian supplies. On the December Kansas City contract support is the $4.52 fresh low with resistance at the 10-day at $4.76.

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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