DTN Midday Grain Comments 07/27 11:33
All Grains Higher at Midday
Soybeans lead trade higher across the board at midday with warmer forecasts
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow futures up 6 points.
The interest rate products are mostly lower. The dollar index is 13 points
higher. Energies are mixed with crude 0.80 lower. Livestock trade has hogs
lower and cattle and feeders higher. Precious metals are mixed with gold $6.50
Corn trade is 1 to 3 cents higher at midday with trade finding support from
the stronger soybean trade this morning. The weekly ethanol production report
showed production down 3.0% down last week from record levels, stocks were 3.6%
lower, and gasoline demand was 0.12% higher, as producer margins remain strong
and blender margins remain poor. Rains look to work through much of the belt
again, helping to push grain fill and keep the trade talking about very strong
yields. Corn prices in Brazil remain at record levels, limiting exports and
likely expanding acres this winter. The USDA announced export sales of 247,912
metric tons to unknown, split between old and new crop. On the December
contract support is the contract low at $3.33 1/4. Resistance is the 10-day
moving average at $3.48; then the 20-day at $3.55.
Soybean trade is 15 to 19 cents higher at midday with trade finding buying
on concerns about the extended forecast being more stressful for soybeans,
along with trade being a bit oversold coming into the week. Meal is $6 to $7
higher overnight, and oil is flat to 10 points higher. The weather forecast is
still showing hints of a warmer and drier August, which will keep some support
under the trade, while near-term rains could trigger short term selling. Export
business should continue to favor the U.S. with 131,000 metric tons announced
as sold to China for new crop. On the November soybean chart support is at the
$9.63 three-month recent low, then the 200-day moving average at 9.53, with
resistance at the 10-day moving average at $10.15.
Wheat trade is 1 to 5 cents higher across the three cotnracts at midday due
to spillover support from the row crops. The heavy world and domestic supplies
continue to limit upside in wheat with concerns about flour recalls yesterday.
Production estimates continue to slide out of continental Europe while Russian
production remains strong. Some buying wheat versus selling bean spreading
supported wheat the past week, but the fear of hot August weather appears to
have quickly scared some spreaders out of position. This was not a surprise and
spring wheat should stay supported versus winter wheat contracts. On the Kansas
City December chart support is the 10-day and 20-day moving averages around
$4.40 which we are testing at midday, with the 50-day resistance at 4.74.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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