DTN Midday Grain Comments 05/29 11:30
Corn, Wheat Lower at Midday
Soybeans are firmer at midday while corn and wheat struggles.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow index down 155. The
interest rate products are lower. The dollar index is 10 points higher.
Energies are higher, crude is up 1.80. Livestock trade is mixed. Precious
metals are mixed with gold flat.
Corn trade 2 to 3 cents lower at midday with trade turning lower after the
EPA reduced ethanol volume requirements from 15 billion to 14 billion. The news
may be a bit confusing with higher expected 2016 usage also viewed as friendly
corn by some. The trading range has been mixed with trade 3 1/2 lower to 3 1/2
higher on the day. Ethanol producer and user margins remain positive which
should limit downside in the near term. Rains move back in over the next few
days ending the brief bit of warm and sunny weather. The weekly export sales
were mediocre at 654,600 metric tons. On the December chart resistance is at
the 10-day and 20-day moving averages both at $3.77 with support at the $3.65
1/4 low printed yesterday then the $3.64 1/2 contract low printed nearly eight
months ago. It is just early in the growing season to have big selling interest
around the contract lows. Most expect slow trade this afternoon.
Soybean trade is 4 to 8 cents higher at midday with support from enhanced
biodiesel manadates in the EPA ruling. Meal is $2 to $3 lower, and bean oil is
130 points higher. Old crop commercial demand remains good, which is limiting
downside, but we still printed a fresh nearby contract low this week.
Additional fund pressure should not be a surprise near term if we remain below
all major moving averages. The July 10-day is at $9.37 representing nearby
chart resistance and the lowest major moving average. The weekly export sales
were mixed with 322,400 metric tons of old crop bean sales, 55,200 of new crop,
meal was 123,700 of old crop, and 120,300 of new crop meal, and 9,200 of oil.
On the November soybean chart the 10-day at $9.19 is resistance with support at
$9. If we cut through $9 easily before the week is over expect some long
liquidation to most likely give us some active trade going into the weekend.
Wheat trade is 8 to 12 cents lower at midday with renewed fund selling
pressuring wheat. The dollar rally has cooled off, but is generally holding
strength. Excessively wet weather in the US and hints of dryness elsewhere will
continue keep a level of support out there, but that hasn't been the market
focus this week. The world wheat weather has seen some improvement to the
forecasts, but issues look to remain for now. Export sales were disappointing
at 296,100 metric tons between the two crop years. On the Kansas City July
chart support is at $5, then the $4.85 contract low with resistance at the
20-day moving average of $5.20.
David Fiala can be reached at email@example.com
Follow David Fiala on Twitter @davidfiala
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