The U.S. stock market indices are firmer with the Dow up 35 points. The interest rate products are higher. The dollar index is 9 points higher. Energies are firmer with crude up 0.50. Livestock trade is mostly higher. Precious metals are mixed with gold down 3.50.
Corn trade is narrowly mixed at midday with trade chopping along around $4.00 on the July contract. 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 the energy complex scoring new highs today, with Memorial Day demand just around the corner. Weekly export sales remained sold at 985,700 of old crop, and 129,200 of new. 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 narrowly mixed at midday with trade trying to reverse from the fresh lows scored yesterday and push the July contract back above the 10.00 area. Meal is flat to $1 lower and oil is 55 to 65 points higher. 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 in Argentina. Crush margins have narrowed with meal some $30 a ton off the highs. Weekly export sales were mixed with 281,900 metric tons of old crop, 224,700 of new, 376,000 of old meal, 45,700 of new meal, and 10,200 of oil. On the July chart, trade is back below the 200-day at $10.16 with the next level of support the lower bolliger band at 998 3/8.
Wheat trade is 5 to 10 cents higher at midday with focus switching back to the poor conditions on the plains. The dollar remains near the upper end of the range. 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 should continue catching up. The Black Sea area will continue to dominate export trade with weather issues limited for the moment. Black Sea values are moving back towards $199 a ton. Weekly export sales remained soft at 63,100 metric tons, and 131,700 metric tons. 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, which we are back above at midday.
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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