DTN Midday Grain Comments

General Comments

The U.S. stock market indices are higher with the Dow futures up 190 points. The interest rate products are weaker. The dollar index is 33 points lower. Energies are lower with crude down 65 cents. Livestock trade is firm. Precious metals are firmer with gold up $2.

CORN

Corn trade is 1 to 2 cents lower after trading 2 to 3 higher; this has us back near the four-month lows. Warm weather should continue with most of the belt seeing some rain this week, but the many argue the heat will keep the aggressive crop progress moving along favorably. The second-crop areas of Brazil are getting closer to the end of the growing season with continued nearby dry weather with production estimates edging lower again. The weekly ethanol report has stocks higher which are pressuring corn at midday along with lower crude and unleaded futures. Basis has been flat to firmer in recent days with the lower board. On the July chart we edged back below the 200-day, at $3.82 which is now nearby resistance then the 100-day at $3.87. Nearby support is the $3.80 low printed yesterday then the $3.77 1/2 4-month low.

SOYBEANS

Soybean trade is 2 to 4 cents lower at midday after trading over a nickel higher overnight. The trade notes futures are struggling to hold the light bounce with weather mostly benign. Meal is $2 lower and oil is 5-10 points lower. Crush margins have narrowed but remain positive with the weaker beans, with meal drifting below the $370 level a concern here at midday. Bean basis has remained steady, with trade likely to remain quiet in the near term as old crop exports remain slow. Brazil continues to move bushels despite the labor unrest. On the July chart, trade is back below all the major moving averages with the 20-day at 10.17 the first level of resistance with support at the lower Bollinger Band at 9.88 as support.

WHEAT

Wheat trade is 10 to 12 cents higher on the winter wheat contracts and 5 to 6 cents higher on Minneapolis. Buying enthusiasm has returned this week as harvest continues to expand across the plains. 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 average to 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. HRW basis has improved ahead of the anticipated harvest expectations. On the July Kansas City, we moved above the 10-day and highest major moving average at $5.44 but are back below it at midday; this is first resistance then the upper Bollinger Band at $5.64. Support is t the $5.33 20-day moving average.

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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