DTN Midday Grain Comments 08/16 11:18
Grains Mixed at Midday
Rain in the western belt has us lower at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow futures up 74 points.
The interest rate products are higher. The dollar index is 22 higher. Energies
are lower with crude down 030. Livestock trade is lower. Precious metals are
Corn trade is at the daily low at midday sitting 4 cents lower; trade was
mixed overnight and this morning but with widespread rain coming across the
western belt the bears are in control. December hit a new 2017 low at $3.64 1/4
a short while ago, so we are 53 cents off the contract high printed just 5
weeks ago. Long liquidation this afternoon and this week could help accelerate
downside. The weaker corn is pulling ethanol down with production hedging. The
weekly EIA report had production up 4.64%, stocks 2.25% higher even with gas
demand off 2.81%. On the December chart support is the new low for the move at
$3.64 1/4 which is the new low for the move and the lower Bollinger Band.
Resistance is at the 10-day moving average at $3.77.
Soybean trade is 1 to 2 cents lower at midday in slow trade, bean oil is up
10 limiting downside in beans. Outside markets are mixed, weather is viewed as
negative but pressure is light due to November futures already down around
$9.20. There is also still some disagreement on the extended forecasts. Good
rains and near normal temperatures in August is good for bean yields. China
will be watched for more follow up buying with the weakness to start the week
with another 132,000 metric tons announced this a.m., along with 132,000 to
unknown for new crop. Good demand is the argument of market bulls and
rightfully so with trade watching for more on the daily wire. NOPA crush for
July was 144.72 million bushels, just above expectations. So demand news
remains good. On the November chart support is at the fresh low for the move at
$9.21, then the one-year low printed in June at $9.07. The 10-day moving
average at $9.50 the first level of resistance.
Wheat trade mixed with Minneapolis up a dime and Kansas City/Chicago down
nearly a dime. It is a sad day for any wheat bulls with both Kansas City and
Chicago slipping to new contract lows. The trend of growing global supplies has
not been broken; lower prices economically discourage production and encourage
greater usage. This is what the market is doing. The poor spring wheat
production year is expected to keep Minneapolis firm versus Chicago or Kansas
City and just stay volatile. The dollar strength today is negative wheat. The
Russian harvest is moving along with strong yields but logistics will remain
the limiting factor. Egypt is actively seeking wheat again, along with
Venezuela securing Russian supplies. On the December Kansas City contract
support is the $4.52 fresh low with resistance at the 10-day at $4.76.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Advisor.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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