DTN Midday Grain Comments 07/17 11:04
Grains Higher at Midday
Wheat and soybeans lead firm trade at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are flat to higher with the Dow up 10. The
interest rate products are firmer. The dollar index is 25 points higher.
Energies are mixed with crude down 0.55. Livestock trade is mixed with cattle
leading. Precious metals are weaker with gold down $10.70.
Corn trade is 5 to 7 cents higher at midday with trade trying to build some
positive momentum into midweek with a small gap higher overnight. Cooler
weather looks to hang around the next couple weeks with mixed moisture
potential with a growing focus on early August weather with the advanced state
of the crop. Ethanol board margins remain positive with some pressure from
crude with ethanol futures edging higher to narrow blender margins with the
energy weakness and firmer ethanol futures again overnight. Corn basis has been
flat to firmer for the most part. The weekly Crop Progress report showed
conditions down 3 percentage points at 72% good to excellent, and 9% poor to
very poor. Silking was 63% complete vs. 37% on average. On the September chart,
we are right at the 10-day at $3.48, with the 20-day at $3.54 the next round
up. Support is the fresh low of $3.37 scored last week with the lower Bollinger
Band at $3.38 above that.
Soybean trade is 8 to 11 cents higher at midday with trade fighting off
attempts to break lower this morning with trade looking for two strong finishes
in a row. Meal is flat to $1 higher, and oil is 10 to 20 points higher. Brazil
remains at a stout premium to U.S. origin, which is compounded by the ongoing
logistics issues with Brazil with premiums around $2.05. Bean basis has
remained steady with processors taking the lead with record crush again for the
month of June, even if it was slightly below expectations. The daily export
wire has remained quiet. Weather shouldn't be a major driver near term for
soybeans, but pod fill will be here soon. Weekly crop progress showed
conditions down 2 percentage points at 69% good to excellent, and 9% poor to
very poor, with 65% blooming vs. 45% on average, and 26% setting pods vs. 11%
on average. On the August chart, the 10-day is at $8.43 is again the first
level of resistance, which we are still below even with the strength today with
further support the lower Bollinger Band at $8.11 with the next level
resistance the 20-day at $8.60.
Wheat trade is 6 to 12 cents higher with trade regaining the Monday losses
this morning. Winter wheats are leading. Harvest pressure should start to fade
as it winds down for the winter wheat. Spring wheat should see good progress in
Canada with drier weather showing up again for some. Russian harvest continues
to move along, as well, with yields remaining below last year's levels. HRW
basis has remained solid through harvest with the better protein with offered
premiums declining. Weekly crop progress had winter wheat at 74% complete vs.
71% on average, with spring wheat at 80% good to excellent, and 4% poor to very
poor, unchanged on the week with 91% headed vs. 85% on average. On the
September, KC is just above the 20-day at $4.90 and the 10-day at $4.92 at
midday with the 200-day at $5.11 the next level of resistance.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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