DTN Midday Grain Comments

General Comments

The U.S. stock market indices are mixed with the Dow futures down 65 points. The interest rate products are weaker. The dollar index is 12 higher. Energies are mixed with crude up 0.20. Livestock trade is mixed. Precious metals are firmer with gold up 2.80.

CORN

Corn trade is 2 to 4 cents higher at midday with trade trying to rebuild footing after the washout to start the week with mixed weather forecast and calmer outside markets. Warm weather should continue with most of the belt seeing some rain this week. The second-crop areas of Brazil are getting closer to the end of the growing season with continued nearby dry weather. Ethanol margins are stable this with crude and ethanol futures sideways even as summer driving season expands. Weekly crop conditions were down 1 percentage point to 78% good to excellent, and 3% poor to very poor. Planting was 97% complete, 2 percentage points better than average, with emergence at 86% vs. 83% on average. On the July chart we edged back above the 200-day at $3.82 at midday with the 100-day at $3.89 the next level of resistance with $3.80 nearby becoming support as the overnight low.

SOYBEANS

Soybean trade is narrowly mixed at midday with two-sided action to start the day with trade trying to find better support. Meal is flat to $1 lower and oil is flat to 10 points lower. Crush margins have narrowed but remain positive, with meal drifting below the $370 level. Basis has remained steady, with trade likely to remain quiet in the near term. Brazil continues to move bushels despite the labor unrest. The initial soybean ratings were 75% good to excellent at 4% poor to very poor, with 87% planted, 12 percentage points ahead of average, and 68% emerged vs. 52% on average. On the July chart, trade is back below all the major moving averages with the 200-day at 10.18 the first level of resistance with support the lower Bollinger Band at 9.93 1/4 as support.

WHEAT

Wheat trade is 5 to 10 cents higher with buying returning at midday with the winter wheats leading even as harvest expands. Warmer weather should allow early harvest to progress quickly with the lagging maturity catching up with the continued warm weather which tends to limit yields but early protein numbers remain strong. Spring wheat should see better progress with warmer weather helping to catch up emergence, with Canada remaining on the dry side, with mixed weather in Siberia. Australia is expected to see better short-term rains. Black Sea values are at $206.25 a ton with world supplies remaining ample. Winter wheat conditions were off 1 percentage point at 37% good to excellent, and 34% poor to very poor, with 83% headed same as average, and 5% harvested, 1 percentage point ahead of average. Initial spring wheat conditions were 70% good to excellent, and 4% poor to very poor with 97% planted, 3 percentage points ahead of average, and 81% emerged, 1 percentage point behind average. On the July Kansas City, we are back above the 50-day at 5.24, with the next level of support the 100-day at $5.13, with resistance at the 20-day at $5.34 which we tested overnight.

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

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