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 firmer with the Dow 145 higher. The dollar index is 10 lower. Interest rate products are weaker. Energies are mixed with crude 0.10 higher. Livestock trade is mixed. Precious metals are mixed with gold 4.00 higher.

CORN

Corn trade is 6 to 8 cents higher at midday with the warmer forecast helping to push trade. The forecast brings heat and drier weather into the pollination window as of now, but as always the forecast can shift quickly. Ethanol margins will continue to see pressure with the rebound in corn values and the back half of summer driving season with futures up to 1.57 a gallon. Harvest will continue to expand in South America, with Black Sea conditions mixed along with China. Basis remains very strong across a variety of areas, especially the East with intramonth spreads stable wider this morning. On the report, yields were left unchanged at 166 BPA for production of 13.825 billion bushels of carryout at 2.34 billion, up 150 million from last month, and new crop at 2.01 billion, up 335 million from last month. World ending stocks were 328.8 million metric tons, up slightly from last month on old crop, and new crop was 298.9, up 9 million from last month. The USDA announced 104,100 metric tons of corn sold to Panama. On the September nearby chart support is at the 20-day at $4.42 which we closed above yesterday with further resistance the recent high at $4.53 then the upper Bollinger Band at $4.67.

SOYBEANS

Soybean trade is 6 to 8 cents higher with trade still struggling to find the means for a bigger push even with supportive report numbers. Meal is flat to $1.00 higher and oil is flat to 10 points lower. Crush margins remain positive with meal and oil moving more sideways in recent days. World export demand remains slow, with the real remaining near the upper end of the range and gaining ground this week. Weather is on the back burner for soybeans until we get deeper into the growing season for now. The WASDE report showed yields at 48.5 BPA, down 1 from last month for production at 3.845 billion bushels, down 305 million from last month. Old crop stocks were 1.05 billion, down slightly from last month, with new crop at 795 million down, 250 million for last month. World stocks were 113.0 million metric tons on old crop, up fractionally, with new crop at 104.5 million, down 8 million from last month. The September chart support is the 100-day at 8.99, and resistance the 20-day at 9.06, which we have edged above at midday, with the next level up the 200-day at 9.16.

WHEAT

Wheat trade is 1 to 5 cents higher with trade looking to consolidate the post report gains and the higher protein wheat leading. The KC/Chicago spread has narrowed 4 cents this morning but remains historically wide. The corn/HRW spread unwound yesterday with wheat gaining 9 cents before reversing slightly today. The warmer weather should allow harvest to progress and move the home stretch, while Europe makes progress, and the Black Sea continues to see mixed yields with Russian estimates moving lower. The dollar is below 97 on the index with sell off post Fed Statement. On the WASDE report, wheat carryout came in at 1.000 billion, down 72 million from last month, with production at 1.921 billion bushels, up 10 million from last month. World stocks were 275.2 million metric tons on old crop, down 1.4 million, and new crop at 286.5 million, down 8 million from last month. On the September Kansas City chart, support is the 50-day at $4.52, with resistance the 20-day at 4.62.

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