DTN Midday Grain Comments 08/26 11:45
Grains Moving Lower at Midday
Wheat makes new contract lows with double-digit midday losses, beans follow
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow up 88 points. The
interest rate products are mostly lower. The dollar index is 11 points higher.
Energies are firmer with crude up 0.45. Livestock trade is mixed with cattle
lower and hogs sharply higher. Precious metals are firmer with gold up $8.90.
Corn trade is 5 cents lower at midday with very small early strength fading
and chart selling emerging. Futures are just over a nickel away from the
contract lows. The dollar has firmed which is negative for grains, after the
Fed Chairman indicated that they felt the environment would warrant further
interest rate hikes down the road. The crop tour will wrap up, with the final
yield expected to be below the USDA numbers from earlier in the month, but not
wildly so. Ethanol margins have improved with ethanol futures ticking higher
with the cheaper corn. Corn basis will remain on the defensive as harvest
approaches but the lower board today is slowing that. On the chart, resistance
is in the area in between the 10-day and 20-day moving averages at $3.35 -
3.37, then the $3.44 1/4 August high. The contract low of $3.22 1/2 is December
Soybean futures 11 to 13 cents lower at midday with early strength giving
way at midday after the sharp break yesterday keeping chart pressure in
control. Meal is $3 lower and bean oil is 25 points lower. The crop tour will
wrap up with final tour results expected after the close to reiterate the
potential for an excellent crop. Good to excellent ratings should remain steady
if not go up a percentage point next week with moisture working through many
areas, and a lack of excessive heat. The daily wire has been quieter in recent
days, raising concerns about slower demand. On the November soybean chart
support is at the $9.70 low from this morning then the 200-day at $9.64. Chart
resistance is at the 10-day at $10.04 then the 100-day at $10.29.
Wheat trade has washed out to new lows with the firmer dollar and complete
lack of friendly news. Futures are down as much as 15 cents. Spring wheat will
continue to see harvest pressure with ample supply weighing on all classes.
Canadian harvest will be hitting full stride soon, and Egypt is expected to
tender for imports again soon with some changes in the government buying
agency, with Russia winning the tenders today. On the KC December chart
resistance is at the $4.38 20-day moving average with support the $4.21
contract made this morning. Chicago has printed a new contract low for the
third day in a row, which Kansas City starting to reestablish its typical
premium over the contract.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at email@example.com
Follow David Fiala on Twitter @davidfiala
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