DTN Midday Grain Comments 07/22 11:44
Grain Trade Mixed at Midday
Wheat is the midday leader with short profit taking and buying against row
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow futures down 5 points.
The interest rate products are mostly higher. The dollar index is 43 points
higher. Energies are mixed with crude down 0.70. Livestock trade is mostly
higher. Precious metals are lower with gold down $8.00.
Corn trade is narrowly mixed at midday with trade bouncing off fresh
contract lows printed earlier this morning. A fresh set of rains hit Missouri,
Illinois, Indiana, and Pennsylvania this morning, and the heat looks to
moderate by the weekend. Ethanol margins remain solid for the producers while
the blender margins have tightened with the building unleaded stocks, with
ethanol futures slightly lower this morning. South American corn prices have
firmed as the second crop harvest in Brazil wraps up, which should push more
export business back the U.S. with siginifcant discounts on the world market.
Basis has remained fairly flat this week but expected to tighten near term with
the lower board. On the December contract support is the contract low at $3.33
1/4 cents with the $3.31 area below that, and resistance is the 10-day moving
average at $3.54.
Soybean trade is 37 to 42 cents lower at midday with a more mild forecast
with rain for next week adding to selling pressure with liquidation
accelerating. Meal is $12 to $13 lower and oil is 75 to 85 points lower. The
extended forecast will be watched closesly with more of the crop moving into
pod fill as August approaches with more moderate forecasts raising yield
expectations. Export activity should remain good with US offers a strong
discount to Brazil for the most part. On the November soybean chart support is
the 200-day moving average at 9.53, with resistance at the 10-day moving
average at $10.47.
Wheat trade is 5 to 8 cents higher across the three contracts at midday with
short profit taking starting to build mid-morning with trade coming solidly off
the session and some contract lows. Remaining winter wheat harvest acres should
continue to progress in the near term, both domestically and overseas. Quality
concerns will remain with low protein remaining par for the course as winter
wheat harvest moves north. The continental European wheat crop is continuing to
see cuts in production estimates while the Black Sea area raises theirs
slightly. Some buying wheat selling row crop spreading is noted supporting
wheat today, not necessarily friendly wheat news. Part of being in oversold
conditions. On the Kansas City December chart support is the $4.24 contract
low. Resistance is at the 10-day moving average at $4.40, which we have tested
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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