DTN Midday Grain Comments 06/22 11:18
Beans Higher at Midday
Soybeans are the midday leader with wheat lagging.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow up 155. The interest
rate products are higher. The dollar index is 6 points lower. Energies are
firmer with crude up 2.50. Livestock trade is mixed. Precious metals are flat.
Corn trade is flat to 2 cents higher at midday with light two sided trade so
far as the market looks towards the weekend with support from soybeans moving
higher. Harvest should continue to expand in the double-crop areas of Brazil
with open weather continuing, while Black-Sea-area corn remains mostly dry.
U.S. weather looks to remain wet in the near term, with heat still showing in
the extended forecast, along with good moisture prospects with the biggest area
of concern overnight temps going into pollination. Ethanol blending margins
remain exceptionally strong with unleaded trading at a 60 cent premium to
ethanol and crude working higher on OPEC production concerns. Basis has been
flat to firmer in recent days with the lower board. The USDA announced 131,000
metric tons of corn sold to Mexico, and 117,000 to Panama. On the July chart we
remain below the 10-day, at $3.62 which is now nearby resistance and then the
200-day at $3.82. Nearby support is the $3.44 lower Bollinger Band then the
$3.38 3/4 spike low from Tuesday.
Soybean trade is 9 to 14 cents higher at midday with trade trying to
establish itself better at the lower end of the range. Meal is $5 to $6 higher
and oil is 5 to 15 points higher. Trade concerns will continue to fuel
volatility with little fresh news on that front today. Bean basis has remained
steady to firmer, with trade likely to remain quiet in the near term as old
crop exports remain slow with Brazilian values remaining strong on the
anticipation of future business. Widespread rains should boost near term
growth. Brazil continues to struggle with the logistical issues compounded by
the trucker strikes with a large shipping line up. On the July chart support is
at lower Bollinger band at 8.53, and resistance the 10-day at $9.19.
Wheat trade is flat to 3 cents lower at midday with the choppy recent
pattern continuing while harvest slows in the U.S. and stress continues in
Russia. Wet weather for Kansas should slow harvest in the next week or so, with
good overall progress so far and much of the eastern part of the state wrapped
up, and heat returning next week to finish harvest. Spring wheat should see
good progress with Canada remaining drier. Australia should see some
improvement but overall remains mixed. HRW basis has remains solid ahead of the
anticipated harvest protein improvement and board weakness. On the July Kansas
City is back below all the major moving averages with the 200-day at $4.96 the
closest to the market, and $4.71 becoming support as the fresh low.
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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