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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

 General Comments

   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

   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 
support. 

   SOYBEANS

   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

   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 dfiala@futuresone.com 
Follow David Fiala on Twitter @davidfiala


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