DTN Midday Grain Comments

General Comments

The U.S. stock market indices are lower with the Dow down 155. The interest rate products are lower. The dollar index is 22 points lower. Energies are lower with crude down $0.30. Livestock trade is lower. Precious metals are mixed.

CORN

Corn trade is 1 to 2 cents higher at midday with trade again fighting off an attempt to break lower overnight. The overnight to midday trading range is over a dime and we are a few cents off the high here at midday. Outside markets have the dollar, crude and the stock market all lower giving mixed market direction to the grain trade. Harvest should continue to expand in the double crop areas of Brazil with open weather continuing, while Black Sea area corn remains mostly dry. U.S. weather looks to remain wet in the near term, with heat still showing in the extended forecast, along with good moisture prospects. Ethanol blending margins remain exceptionally strong with unleaded trading at a 60 cent premium to ethanol. Basis has been flat to firmer in recent days with the lower board. The weekly export sales were low at 165,900 tons of old crop and 339,700 of new. Reductions of primarily unknown destinations totaled 584,700 tons. On the July chart we remain below the 10-day, at $3.64 which is now nearby resistance and then the 200-day at $3.82. Nearby support is the $3.44 lower Bollinger Band then the $3.38 3/4 spike low from Tuesday.

SOYBEANS

Soybean trade is 3 to 5 cents lower with trade coming back from dime lower trade overnight. Meal is flat to $1 lower and oil is 15 to 20 points lower. Trade concerns will continue to fuel volatility with little fresh news on that front overnight. Bean basis has remained steady to firmer, with trade likely to remain quiet in the near term as old crop exports remain slow with Brazilian values remaining strong on the anticipation of future business. Widespread rains should boost near term growth. Brazil continues to struggle with the logistical issues compounded by the trucker strikes with a large shipping line up. The weekly export sales were in line with expectations at 301,700 tons of old crop and 227,600 tons of new. Meal sales were at 115,100 tons and bean oil at 16,000. On the July chart support is at lower Bollinger band at 8.63, and resistance the 10-day at $9.22.

WHEAT

Wheat trade is 4 to 6 cents higher at midday with harvest pausing for rains, while weather concerns build in Russia with trade bouncing back from the overnight weakness. Wet weather for Kansas should slow harvest in the next week or so, with good overall progress so far and much of the eastern part of the state wrapped up, and heat returning next week to finish harvest. Spring wheat should see good progress with Canada remaining drier. Australia should see some improvement but overall remains mixed. Russian winter wheat is likely to remain on the dry side, with the spring wheat cool and wet with growing concerns there. HRW basis has remains solid ahead of the anticipated harvest protein improvement and board weakness. The weekly export sales were within expectations at 461,600 tons. On the July chart, Kansas City is back below all the major moving averages with the 200-day at $4.96 the closest to the market, and $4.71 becoming support as the fresh low.

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

(BAS)

Copyright 2018 DTN/The Progressive Farmer. All rights reserved.