DTN Midday Grain Comments 07/07 11:27
Grains Lower at Midday
Soybeans have led trade lower at midday but we have bounced from sharper
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are lower with the Dow index down 215 points. The
interest rate products are lower. The dollar index is 75 points higher.
Energies are lower with crude down $1.30. Livestock trade is mostly lower.
Precious metals are sharply lower with gold down $20.
Corn trade is 4 to 6 cents lower at midday with pressure from stronger
dollar and mild improvements in crop conditions nationally, as well as
spillover from the soybean pit. Futures were down around a dime at the morning
low. Ethanol margins are under pressure for producers and blenders with crude
oil sharply lower, but DDG values have supported margins a bit. Weather
forecasts look to bring more wet weather to the excessively damp areas, and
heat to the Western Belt this weekend. The weekly crop progress showed a slight
improvement at 69% good to excellent and 8% poor to very poor, and silking at
12% vs. 18% on average. On the December chart, major support is at the 200-day
moving average at $4.03, with the 10-day moving average just above that at
$4.12. Resistance is at the $4.40 December high then the $4.50 12-month high.
Soybean trade is 20 to 25 cents lower at midday with meal $2 to $7 lower,
and oil is 110 to 120 points lower. Beans have been down over 30 cents. The
sharply lower crude oil trade is adding pressure to oil side of the product
complex. Widespread commodity liquidation is also helping to add pressure today
along with the crop report being a little better than expected. The weekly crop
condition report was unchanged at 63% good to excellent and 8% poor to very
poor, with planting 96% vs. 100% on average, and blooming in line with average
at 21%, with the bulk of the unplanted acres in Missouri. On the November chart
the 10-day moving average at $9.98 is support, which we have moved below at
midday, with the 200-day moving average at $9.71 as support with $10.56 3/4
resistance, which is our 10-month high.
Wheat trade is 5 to 9 cents lower at midday with the stronger dollar and
weak row crop trade weighting on the wheat contracts. Spring wheat continues to
show the most strength. Harvest moved past the halfway point for winter wheat
at 55% complete vs. 59% on average. The soft winter wheat harvest will likely
remain slow in the near term. Drier weather looks to persist elsewhere in the
world in the near term. Weekly crop progress showed spring wheat slightly lower
at 70% good to excellent at 6% poor to very poor with 79% headed vs. 47% on
average. Winter wheat was 40% good to excellent, and 23% poor to very poor for
the last condition report of the year. On the September Kansas City wheat chart
support is at the $5.79 200-day, with the 10-day at $5.74 the next round of
support. The major high is the December 2014 high just above $7.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered trading adviser.
David Fiala can be reached at firstname.lastname@example.org
Follow David Fiala on Twitter @davidfiala
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