DTN Midday Grain Comments 07/16 12:11
Grains Lower at Midday
Broadly weaker trade at midday with the forecast remaining in flux.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are flat with the Dow 6 higher. The dollar
index is 39 higher. Interest rate products are firmer. Energies are flat with
crude $0.05 lower. Livestock trade is mixed. Precious metals are firmer with
gold $1.50 lower.
Corn trade is 6 to 8 cents lower at midday with selling continuing after the
improvement in forecast and crop conditions ahead of the late-week heat,
although trade was able to firm off the lows. 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 most and some showers
today. Ethanol margins will remain tight with futures slipping this morning.
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 softer
to start the week. Mexico is considering subsidies to promote domestic
production coming forward as well. Weekly crop progress showed 58% good to
excellent, 12% poor to very poor, up 1 percentage point on the week, silking
was 17% vs. 42% on average. On the September nearby chart support is at the
50-day at $4.22 with further resistance the 10-day at $4.38.
Soybean trade is 10 to 12 cents lower at midday with a lack of a demand
story continuing to limit upside. Meal is $2.50 to $3.50 lower with oil 10 to
20 points lower. Crush margins remain positive with meal and oil regaining the
lead today but NOPA crush came in 5 million bushels below expectations at 149
million. World export demand remains slow, with the real setting back sharply
today to hinder export ability. Weather will come into focus more as we head
towards August and podfill season. Weekly crop progress was up 1 percentage
point at 54% good to excellent, and 12% poor to very poor, with 95% emerged vs.
100% on average, and 22% blooming vs. 49% on average. The September chart
support is the 50-day at 8.80, with the next level up the 100-day at 8.97 which
we fell below overnight.
Wheat trade is flat to 2 cents lower with trade following the lead of the
row crops today with some light two sided trade at times. The Kansas
City/Chicago spread is steady this morning. The corn/HRW spread has widened
again this morning. 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 firmer action today. Weekly crop
progress showing wheat harvest at 57% vs. 71% on average, with spring wheat 76%
good to excellent, and 4% poor to very poor, down 2 percentage points, with 78%
headed vs. 87% on average. The September Kansas City chart support is the
recent low at $4.39 with the first resistance the 10-day at 4.46 1/2, which we
are just above at midday.
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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