DTN Midday Grain Comments 05/17 11:23
Beans, Corn Higher at Midday
Old crop corn and beans are seeing double-digit midday gains.
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are higher with the Dow up 60. The interest rate
products are higher. The dollar index is 67 higher. Energies are higher with
crude up $.30. Livestock trade is lower. Precious metals are mixed with gold
Corn trade is a dime higher on July to 2 lower on December at midday. Some
rain moved through last night, likely idling some areas today with more coming
over the weekend. This seemed to slow the pressure this morning. December
futures slipped to the $5.17 level which many may call a double bottom with
this matching our late April low. That would be if we can firm into the close.
Although we can point to new crop balance sheets and bang the bear drum, the
trade is skeptical after the below to well below trendline yields the past
three years. So the trade is not expecting weather preimium to just disspear
when we have around half the crop to still get in the ground. Late plantings
mean a late arrival of new crop corn which is supporting old crop futures. Also
this pushes pollination later into the summer when the probabilities are for
more stressful weather. Informa lowered its planted acres at 96.82 million
acres, which was not a large enough drop to get anyone excited.
Soybean trade is 10-15 higher on old crop, with new crop slightly firmer.
Meal is $3-6 higher, and soyoil is 10 to 20 higher. On the July soybean chart
we have moved above the 200-day moving average at $14.32 overnight, a close
above here should help to find more buying. New-crop beans are looking to
remain sideways for the moment with little fresh news there but faster corn
planting should support trade. Brazil has had labor issues flare up again,
potentially disrupting shipping in the near term. There continue to be rumors
of imports to the U.S., but prices need to go higher still to make it work. The
USDA announced two cargos of beans sold to China for the new crop year, and two
more to unknown desinations for next year as well. Informa increased their
soybean acreage estimate to 78.6 million acres.
Wheat trade is 5 to 8 lower in Chicago and Kansas City, and flat to 2 lower
on the Minnepaolis trade. The market has a firm tone at midday due to spillover
support from the row crops. The stronger dollar and better weather forecasts
for Russia has helped to encourage selling. Some fresh talk of exports is
lingering around the market, and could surface over the weekend. Barring a good
recovery today, wheat could potentially see further chart pressure towards the
$6.65 area on the Chicago. Poor weather for the hard red wheat belt should
support spreads. Private crop estimates were for 12.4 million acres of spring
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Trading Adviser
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