DTN Midday Grain Comments

General Comments

U.S. stock market indices are firmer with the Dow futures up 85. The interest rate products are firmer. The dollar index is 34 lower. Energies are mostly higher with crude up 0.80. Livestock trade is narrowly mixed. Precious metals are higher with gold up $.40.

CORN

Corn trade is 1 to 2 cents lower in quiet midday trade with pressure spilling over again from the wheat while soybeans work sideways to lower. Ethanol margins remain tighter with corn at the upper end of the recent range and summer driving season winding down with ethanol futures sliding towards the 1.30 area, along with cheap sugar hindering potential exports on the world market. Corn basis will likely continue to fade with more harvest activity building with the advanced crop across the South with more stability seen early this week. The Midwest crop tour has shown variable yields as expected so far with overall strong yields found in South Dakota and Ohio. The weekly crop progress/conditions showed conditions 2 percentage points lower to 68% good to excellent, and 12% poor to very poor, 85% in the dough, 13% ahead of normal, and 44% dented, 18% ahead of normal. On the December chart futures have support at the 50-day moving average at $3.74 which we have held after fading below the 20-day at $3.78 on Monday.

SOYBEANS

Soybean trade is 4 to 7 cents lower with trade failing to hold the early day session bounce while still trading off the overnight lows. Meal is $2 to $3 lower and oil is flat to 10 points lower. The crop tour will cover soybeans this week as well, but trade progress will probably be more supportive with the big yield numbers already out there and big pod counts confirmed so far. Basis remains wide but has slowed the rate of erosion so far this week. The USDA announced 250,000 metric tons of new crop meal sold to unknown. Weekly crop progress was down 1 percentage point to 65% good to excellent, and 11% poor to very poor, and 91% setting pods, 8% ahead of average. On the November chart support is at the $8.90 20-day and 50-day, which we are below at midday with the lower Bollinger Band at 8.61 further support. Resistance is the $9.22 two-month high.

WHEAT

Wheat trade is 4 to 11 cents lower at midday with pressure continuing after the selling to start the week as export concerns calmed out of the Black Sea with aggressive movement continuing. Spring wheat harvest should continue to move along at a good clip with varied yields so far. The strong US dollar is keeping the U.S. less competitive on the world market but does appear to have a reversal in place today. Matif wheat is off again this morning. Australia remains on the dry side with the crop pace ahead of normal as well with some relief for some areas. Weekly crop progress showed 74% good to excellent and 5% poor to very poor on spring wheat with harvest 60% complete, vs. 44% on average, with 97% of winter wheat cut, 1 percentage point below average. On the December Kansas City chart we have support at the 100-day at 5.60, with resistance the 10-day at 5.81.

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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