DTN Midday Grain Comments 07/17 11:07
Grains Trending Higher at Midday
Row crops have some light buying at midday, with wheat drifting sideways.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow 60 lower. The dollar
index is 16 lower. Interest rate products are weaker. Energies are mixed with
crude 0.35 lower. Livestock trade is mixed with hogs leading. Precious metals
are mixed with gold 12.80 higher.
Corn trade is 2 to 3 cents higher at midday with trade unable to sustain
either end of the range so far. The forecast will continue to draw attention as
more of the crop pollinates with mostly dry conditions expected to continue
with the second week cooler for a few days with the forecasts still moving
around a bit. Ethanol margins will remain poor with production up 19,000
barrels per day, and stocks up 356,000 barrels keeping supplies burdensome.
Harvest should be on the downhill slide for Brazil with more signs of imports
into the SE U.S., with mixed conditions elsewhere. Basis remains very strong
across a variety of areas, especially the East with intramonth spreads steady
today. There has been some talk of 7-8 million acres prevent plant out of the
RMA today. On the September nearby chart support is at the 50-day at $4.23 with
further resistance the 10-day at $4.39, which we tested but did not hold.
Soybean trade is flat to 2 cents higher at midday with trade seeing light
buying return after the early week selling. Meal is flat to $1.00 higher with
oil 10 to 20 points higher. Crush margins remain positive with meal still
holding around $310 a ton. World export demand remains slow, with the real
still cheap vs. the dollar. Weather will come into focus more as we head
towards August and podfill season with talk of 2-3 million acres of prevent
plant from the RMA. The September chart support is the 50-day at 8.80, with the
next level up the 100-day at 8.97 which we are just below at midday, with the
20-day the next round at $9.04.
Wheat trade is narrowly mixed with early strength fading again as harvest
continues. The Kansas City/Chicago spread is 2 wider this a.m. The corn/HRW
spread has widened again this morning as well. The warmer weather should allow
harvest to progress to move to the home stretch, while Europe makes progress,
and the Black Sea continues to see mixed yields with Russian estimates moving
lower again this week. The dollar is just below 97 on the index with weaker
action today. The September Kansas City chart support is the recent low at
$4.39 with the first resistance the 10-day at 4.48, which we are just above
overnight with the 100-day at 4.51 the next round up.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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