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DTN Midday Grain Comments     07/21 11:10

   Grains Flat to Lower at Midday

   Grain trade remains under pressure to start the week due to follow-through 
selling and big crop expectations.

By David Fiala
DTN Contributing Analyst

General Comments

   Grain trade remains under pressure to start the week due to follow-through 
selling and big crop expectations. U.S. stock market indices are lower with the 
Dow down 90. Interest rate products are mixed. The dollar index is 5 higher. 
Energies are mixed with crude oil up $.65. Livestock trade is mixed with cattle 
higher and front month hogs lower. Precious metals are higher with gold up $2.  

   CORN

   Corn futures are 5 to 7 cents lower at midday, which has us near the daily 
lows. Once again today is a day we are finding new lows. Ethanol margins remain 
solid with corn basis softening slightly. Ethanol prices have eroded a bit 
going into the second half of summer due to hedging pressure and the cheaper 
price of corn. The weather is expected to be warm and dry the next couple of 
days before reverting to the cooler, wetter pattern we have seen all year. 
Albeit, there is some concern the rains do not look as promising as the 
previous few months. The weekly export inspections were decent at 939,371 
metric tons. The weekly crop progress report is expected to keep conditions 
steady, and development should remain close to the 5-year average. With new 
lows put in this morning, December support will be $3.71, then $3.61. 

   SOYBEANS

   Soybean futures are flat to 18 cents lower at midday with old crop holding 
up and new crop challenging the contract lows. Meal futures are flat to $1 
lower nearby and oil is 20 to 30 points lower. USDA announced 120,000 metric 
tons of old-crop beans sold to China, and new-crop cake and meal sales of 
135,000 metric tons to unknown. The weekly export inspections were okay at 
96,915 metric tons. The weekly crop progress report is expected to keep 
conditions steady, and progress near or just above the 5-year average. On the 
November chart, support is the low at $10.65, with resistance the 10-day moving 
average at $10.91. There is limited support below the contract low, most expect 
sizeable stops below support. With everyone expected to feel a summer blast the 
next several days, the selling pressure could lighten up, but big margin calls 
for market longs have long liquidation an issue.  

   WHEAT

   Wheat futures are 5 to 8 cents lower across the three contracts at midday 
following the row crops lower. The higher protein wheat has given back the 
late-week spread gains this morning. Trade remains heavily oversold, and the 
developments in the Black Sea will continue to be watched closely. The weekly 
export inspections were good at 515,283 metric tons. The weekly crop progress 
report is expected to show winter wheat near 80% cut, and spring wheat 
conditions steady, with heading near 85%. On the September Chicago chart, first 
resistance is the 10-day moving average at $5.40 with support at $5.25 which we 
tested overnight. KC September trade has support at $6.28 and resistance at 
$6.43 on the 10-day moving average.  

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered trading adviser.     

   David Fiala can be reached at dfiala@futuresone.com

   Follow David Fiala on Twitter @davidfiala 


(CZ)

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