DTN Midday Grain Comments 05/24 11:21
Corn, Soybeans Mixed at Midday
Wheat is firmer at midday, corn and beans are back to mixed after some new
highs for the move.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow down 190 points. The
interest rate products are weaker. The dollar index is 20 points lower.
Energies are weaker with crude down .70. Livestock trade is mixed. Precious
metals are firmer with gold up 15.00.
Corn trade is mixed at midday with trade 3 to 4 cents off our highs, but we
are holding gains coming into today. Warm weather should dominate the week,
with rain coverage looking better for the west, and better for the second week
out with some model disagreement. The second crop areas of Brazil are trending
back drier in the near term with some storm damage. Ethanol margins have
narrowed with the energy complex backing off the highs, along with the new corn
highs, but ethanol futures have been able to top $1.53 this morning. Weekly
export sales were decent at 854,300 metric tons of old crop, and 273,400 of new
crop. On the July chart we moved back above the 20-day at $4.01 with the next
level of support is 50-day at 3.95 which we tested to start the week, with
resistance at the fresh high at $4.12 1/4.
Soybean trade is 2 cents lower to 2 cents higher at midday with trade
testing the 10.60 area on the November contract overnight. Meal is $2 lower and
oil is 10 to 20 points higher. Trucker strikes are disrupting logistics in
South America as harvest winds down, and China was booking late-summer soy
cargoes off the West Coast adding support as well with sales of 264,000 metric
tons of new crop announced as sold to unknown. Crush margins have narrowed but
remain positive, with meal starting to find buyers again with trade $10 off the
lows but struggling to hold gains. Weekly export sales were disappointing at
-135,900 metric tons of old crop, and -6,900 of new, 239,500 of meal, -42,600
of new meal, and 17,700 of oil. On the July chart, trade finished just above
the 50-day at $10.38, with the upper Bollinger Band at 10.64 the next level of
Wheat trade is 6 to 11 cents higher at midday with trade looking to extend
the gains seen this week amid the stronger grain trade and demand along with
the continuing weather issues. Warmer weather should help to boost maturity
with the crop still behind normal, but catching up with another week of heat
likely to add stress to the heading crop. Some better rain potential was
showing for Kansas in the overnight forecast but it is getting late to matter.
Spring wheat should see better progress with warmer weather helping to catch up
emergence. The Black Sea area will continue to dominate export trade with
weather issues limited for the moment but some dryness so far with concerns
starting to build, but better rains forecasted for the spring wheat areas.
Black Sea values are at $205 a ton. India is raising import tariffs as well.
Weekly export sales were in line with recent weeks at 112,300 of old, and
340,000 of new. On the July Kansas City contract support is the 20-day at 5.33,
with the upper Bollinger Band at 5.65.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at firstname.lastname@example.org
Follow him on Twitter @davidfiala
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