DTN Midday Grain Comments

All Grains Higher at Midday

David M Fiala
By  David Fiala , DTN Contributing Analyst
(DTN photo by Nick Scalise)

General Comments

The U.S. stock market indices are higher with the Dow 250 points higher. The interest rate products are firmer. The dollar index is 26 higher. Energies are firmer with crude up 1.35. Livestock trade is mixed. Precious metals are mixed with gold down 12.50.

CORN

Corn trade is 6 to 8 cents higher at midday with support from the continued wet forecasts amid near-term planting progress and trade looking to see if gains can hold all day. Drier weather will linger the next few days for many allowing some progress, with bigger rains expected into next week and the week after potentially. Ethanol margins remain stable with ethanol futures crawling higher. Basis will see pressure from increased farmer selling on the rally. Weekly export sales were soft at 553,300 metric tons of old crop, and 80,800 of new crop. On the July nearby chart resistance is 50-day at $3.71 which we are above at midday, with the next level of resistance in the upper Bollinger Band at $3.75 5/8 which we are just above then the 100-day at $3.81 1/4 and support the 10-day and 20-day at $3.64.

SOYBEANS

Soybean trade is 2 to 4 cents higher at midday with trade fading a little from the overnight highs, following the lead of the corn market. Meal is $2.00 to $3.00 higher and oil 20 to 30 points higher. Crush margins remain solidly positive with NOPA crush at 160 million bushels for April, just below expectations. South American currencies remain cheap at the end of harvest, but rising basis is helping U.S. offers with the export wire more active in recent days with weekly sales in line with recent weeks at 370,900 metric tons of old crop, and 303,400 of new crop with 196,300 of old meal, 69,300 of new crop meal, and 10,800 of oil. Field work should generally remain slow in the near term but more progress is likely into next week with little incentive for farmers to push right now. Trade talks are expected to continue, but more U.S. gov't payments to farmers looks to be the more likely outcome at this point with up to 20 billion in aid promised. The July chart support is the 10-day moving average at $8.26, with with the 20-day at $8.47 just above the market.

WHEAT

Wheat trade is 10 to 14 cents higher overnight with Chicago leading but with Kansas City narrowing the gap from overnight with trade looking to consolidate recent gains after failing yesterday. Europe and the Black Sea area will be watched with dryness in the Volga Valley, and wet weather in the Kansas City potentially limiting planting and causing disease issues in the winter wheat. The dollar remains rangebound but firmer. Hard red wheat is working into feed rations in some areas with the bounce in corn values. Weekly export sales were inline with expectations at 114,500 metric tons of old crop, and 419,400 of new crop. On the July Kansas City chart, resistance, the 20-day at $4.05 that we moved above, with the 10-day at $4.01 below that is where we settled yesterday, and the 50-day at $4.27 the next round higher.

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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David Fiala