DTN Midday Grain Comments 07/24 11:31
Beans, Wheat Lower at Midday
Trade is lower across the board at midday led by spring wheat.
Cooler-to-normal conditions outlooks have eased weather concerns.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow futures down 70 points.
The interest rate products are lower. The dollar index is 15 higher. Energies
are mixed with crude up 0.60. Livestock trade has cattle limit lower, and hogs
modestly lower. Precious metals are higher with gold up $1.40.
Corn trade is near the daily highs at midday, but sitting 4 to 5 cents lower
at midday. A 4 cent gap was left with initial pressure last night and we were
down around 9 cents. The weekly export inspections were decent at 935,262
metric tons which limited downside. The USDA announced 135,000 metric tons of
corn sold to unknown for new crop this a.m. Cooler near-term forecasts and some
rains over the weekend were noted for the gap lower open. Corn pollination will
continue with cooler temperatures after the next couple of days but rain
coverage remains less than ideal for the much western belt. There are spots of
excessive moisture in areas of the east. Ethanol production margins are
benefited from the decline in corn. The weekly crop progress report is expected
to show steady to slightly lower conditions, with maturity near normal. On the
December chart support is at the July low of $3.81 3/4 with resistance at the
100-day at $3.90 then the 20-day at $3.94.
Soybean trade is 14 cents lower at midday after trading nearly 25 cents
lower overnight. Meal is $4.50 lower and soybean oil is down 25 points. Cooler
temperatures with some moisture was viewed as less threatening for the coming
weeks; this had beans lower but there was no big interest in selling new crop
beans below $10. We still have six important weeks of weather ahead for beans.
The western belt will likely see the most stress going into August with rains
limited. Market bears hope for more Gulf moisture to make its way into the
western belt and High Plains. The weekly crop progress report is expected to
show a slight decline in conditions with maturity remaining slightly ahead of
normal. The weekly export inspections were okay at 596,620 metric tons. China
is expected to remain active in securing fall supplies on breaks. On the
November chart support is at the 20-day at 9.89 with resistance at the 10-day
Wheat trade is around 10-12 cents lower on Kansas City and Chicago with
Minneapolis down 30 cents. Minneapolis has been down over 40 cents with
corrective action still occurring following the $3 rally from mid-May to early
this month. The spread trade remains active with Minneapolis still $2.50 over
Chicago. The September spread was trading around $1 over in early May, then
traded to nearly $3 over on July 5. The weekly export inspections were ok at
451,665 metric tons. Most world export business remains focused on the Black
Sea area as harvest begins to progress there, with the dollar around the yearly
lows there is hope for export U.S. improvement but world supplies remain ample.
Australia continues to see dryness raising a production concern in addition to
the spring wheat issues here. The Spring wheat tour will go out this week,
which should provide further guidance with trade acting as if much of the
issues are priced-in. The weekly crop progress should show winter wheat harvest
past 85%, with spring wheat conditions steady to slightly lower, and maturity
ahead of normal. On the December Kansas City contract support is the 50-day at
$5.10, then the 100-day at $4.94. Resistance is at the 10-day at $5.39 then the
20-day at $5.44.
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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