The U.S. stock market indices are mixed with the Dow down 200 points. The interest rate products are higher. The dollar index is 30 points higher. Energies are mixed with crude down 0.20. Livestock trade is mostly lower. Precious metals are mixed with gold down 2.50.
Corn trade is 1 to 2 cents lower at midday with the overnight and early gains fading as pressure spills over from soybeans. Wet weather is expected over the weekend with generally warm conditions for most of the Corn Belt. The second-crop areas of Brazil should catch some showers to mitigate some stress but the crop size will likely keep trending lower. Ethanol margins remain stable with corn and ethanol futures drifting higher to start the week, getting back close to 1.50 a gallon, with the weekly report showing production up 18,000 barrels per day, and stocks down 458,000 metric tons. On the July chart we are just above the 20-day at $3.97 1/2 with the next level of support is 50-day at 3.94 which we tested to start the week, with resistance at the recent high at $4.08.
Soybean trade is 12 to 18 cents lower at midday with the rally from yesterday failing to hold again. Meal is $4.00 to $5.00 lower and oil was 40 to 50 points lower. South America's recent pattern should remain intact near term, with the real and peso remaining near record lows to boost export competiveness, with harvest moving towards the home stretch with heavy rains causing some quality issues in Argentina. The April crush remained strong at 161.09 million bushels. On the July chart, trade is back below the 200-day at $10.16 with the next level of support the psychological support at $10.00, which we are close to at midday.
Wheat trade is 1 to 5 cents higher at midday with trade looking to have a short term low formed again with the rebound yesterday. The dollar spiked hard on rising interest rates with better support showing up again today. Warmer weather should help to boost maturity with the crop still well behind normal, with further stress likely if not combined with rain, and the rain is not combined with hail. Spring wheat growing areas look more open to catch up, especially with the higher temps. The Black Sea area will continue to dominate export trade with weather issues limited for the moment. Black Sea values are moving back towards $197 a ton. On the July Kansas City contract support is the 100-day at $5.01 support, with resistance the $5.19 area of the 50-day moving average.
David Fiala is a DTN contributing analyst and the President of FuturesOne and a registered adviser.
He can be reached at firstname.lastname@example.org
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