DTN Midday Grain Comments 07/19 11:33
Grain Trade Mixed at Midday
Wheat and corn lead at midday, with soybeans softer.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow futures down 80. The
interest rate products are weaker. The dollar index is 40 points higher.
Energies are mostly firmer with crude up $1.00. Livestock trade is mixed.
Precious metals are lower with gold down $10.
Corn trade is 3 to 4 cents higher at midday with trade firming back from the
softer trade overnight. On the chart it appears the market is trying to move
through nearby resistance, with a close near these levels likely giving trade a
little better momentum. Cooler weather looks to hang around the next couple
weeks with mixed moisture potential with a growing focus on early August
weather with the advanced state of the crop. Ethanol board margins remain
positive but have narrowed with firmer corn and weaker energy trade, but
ethanol futures are edging back higher this morning. Corn basis has been flat
to firmer for the most part. Weekly export sales were good at 641,000 metric
tons of old crop corn, and 774,500 of new crop. On the September chart, futures
are above the 10-day at $3.47, with the 20-day at $3.52 chart resistance from
here if we get a positive close. Support is the fresh low of $3.37 1/4 scored
last week which is also the level of the lower Bollinger Band.
Soybean trade is 1 to 3 cents lower at midday with the firmer dollar and
ongoing trade issues still providing fairly stiff headwinds so far today. Meal
is $1.50 to 2.50 lower, and oil is 20 to 30 points lower. Brazil remains at a
stout premium to US origin, which is compounded by the ongoing logistics issues
with Brazil with premiums around $2.05, which almost equals the tariffs placed
by China. Bean basis has remained steady with processors taking the lead with
crush margins remaining exceptionally strong. Weekly export sales were decent
at 252,300 metric tons of old crop, 613,400 metric tons of new crop, 131,000
metric tons of old crop meal, 91,000 of new crop meal, 10,900 of old crop oil,
and 9,200 of old crop oil. Weather should not be a major driver near term for
soybeans due to limited stressful forecasts but with pod fill starting, beans
could be more active based upon any forecast changes. On the August chart, the
10-day at $8.42 is again the first level of resistance which we have not been
able to follow through with further support the lower Bollinger Band at 8.13
with the next level resistance the 20-day at 8.55.
Wheat trade is 5 to 8 cents higher at midday with trade trying to push
through the $5.00 area on front month winter wheat, with Chicago just above
that level, and Kansas City just below. Harvest pressure should start to fade
as it winds down for the winter wheat. Spring wheat progress will slow a bit in
North America with the cooler weather. Russian harvest continues to move along
as well with yields remaining below last year's levels as they get into spring
wheat harvest, although they have improved a little more as harvest expands.
Western Europe continues to see excessive heat as harvest moves forward there.
HRW basis has remains solid through harvest with the better protein with
offered premiums declining. The weekly export sales were soft at 300,000 metric
tons. On the September chart, Kansas City is just above the 20-day at $4.89 and
the 10-day at $4.91 at midday with the 200-day at 5.11 the next level of
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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