DTN Midday Grain Comments 07/23 11:08
Grains Mixed at Midday
Flat to lower trade at midday after early gains fade.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are firmer with the Dow 55 higher. The dollar
index is 40 higher. Interest rate products are mixed. Energies are mixed with
crude $0.10 lower. Livestock trade is mixed with hogs leading. Precious metals
are weaker with gold 4.00 lower.
Corn trade is narrowly mixed with light buying after the poor start to the
week with a slight condition decline while spread trade has weakend this a.m.
Trade has gotten fairly oversold as well. Higher temps look to return later in
the week but nothing extreme. Ethanol margins will remain tight with plentiful
supply and summer driving season coming to an end and ethanol futures just
above $1.45 a gallon. World feed grain harvest will keep exports limited in the
near term. Basis has started to moderate in some areas as well with harvest
starting in the SE U.S. Weekly crop progress showed 57% good to excellent, and
13% poor to very poor, down 1 percentage point on the week. 35% of the crop was
silking vs. 66% on average, with 5% in the dough, vs. 10% on average. On the
September nearby chart, support is the fresh low at $4.18 with the 100-day
below that at $4.04, with resistance the 50-day at $4.28.
Soybean trade is flat 2 cents lower with early gains fading again with
soybeans remaining in show-me mode on trade rumors with choppy action likely to
continue. Meal is $0.50 to $1.50 lower and oil is flat to 10 points higher.
World export demand remains slow, with the real still cheap as it has been
unable to sustain gains vs. the dollar. Weather will come into focus more as we
head towards August and podfill season with weekly crop progress showing
conditions unchanged at 54% good to excellent, and 12% poor to very poor with
40% blooming vs. 66% on average, 7% setting pods vs. 28% on average. The
September chart support is the 50-day at 8.85, with the next level up the
100-day at 8.96 which we closed just below with the 10 and 20-day the next
round at $8.99, with 200-day at $9.16 the next level up.
Wheat trade is 2 to 4 cents higher with trade trying to build footing amid
oversold conditions and spillover pressure from the row crops this week. The
Kansas City/Chicago spread has narrowed below 60 cents Monday with trade
touching 56 this a.m. The corn/HRW spread is back to near a dime at midday. The
warmer weather should allow harvest to progress to move to the home stretch for
winter wheat with spring wheat just around the corner, while Europe makes
progress with good yields in France, while the Black Sea and Russia continues
to see mixed yields as harvest rolls on. The dollar is above 97 on the index
with firmer action to open the week after the debt ceiling deal. Weekly crop
progress had winter wheat 69% vs 79% on average, with spring wheat conditions
steady at 76% good to excellent and 4% poor to very poor and heading at 92% vs.
94% on average. The September KC chart support is the recent low at $4.26 with
the first resistance the 10-day at 4.45, with the 100-day at 4.50 the next
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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