DTN Midday Grain Comments 07/28 11:08
Corn Flat to Lower at Midday
Soybeans and wheat are higher at midday, while corn continues to struggle.
By David Fiala
DTN Contributing Analyst
The U.S. stock markets are higher with the Dow futures up 100 points. The
interest rate products are higher. The dollar index is 28 points higher.
Energies are mostly higher with crude up $0.35. Livestock trade is mostly
higher. Precious metals are mostly higher with gold down $2.
Corn trade is flat to 2 cents lower in quiet trade at midday with markets
taking a wait-and-see approach after the sharp break to start the week.
Weather forecasts look near ideal with normal-type temperatures and moisture in
the forecasts, plus some moisture over the weekend was better than expected.
Ethanol margins remain under pressure from the weaker crude and unleaded values
eating in the blender margins, although the weaker corn prices are supportive
to producer margins, and ethanol futures are slightly higher this morning. The
USDA announced 120,000 metric tons of milo sold to China as well in a positive
sign for feed grain demand. The weekly crop progress report had conditions 1%
better at 70% good to excellent, 9% poor to very poor, with silking 1% ahead of
average at 78%, and 14% in the dough vs. 17% on average. On the December chart
corn slipped below the $3.97 level where we found both the 50-day and 100-day
moving averages. This is now chart resistance. The first real notable support
now is the contract low at $3.62 1/2, which is only 21 cents below our close
Soybean trade is 10 to 15 cents higher at midday with some profit taking vs.
recent shorts in early trade today. Meal is $1 to $2 higher and oil is 30 to 40
points higher. The Chinese economic concerns will likely continue to weigh on
the market along with the weak corn and crude oil trade encouraging selling on
rallies. The weekly crop progress report had conditions unchanged at 62% good
to excellent, but 1% moved from good to excellent. Progress noted blooming at
71% vs. 72% on average, and setting pods at 34%, versus 31% on average. On the
November chart, support now is the contract lows at $8.95. Resistance on a
bounce will be the 100-day moving average at $9.55, which is the lowest major
Wheat trade is 3 to 6 cents higher across the three contracts at midday,
wheat made new contract lows yesterday, which is encouraging some profit
taking. Wheat is heavily sold and could find more sustained buying if the row
crop trade remains firmer. The dollar has firmed a bit this morning, dampening
hopes of a more sustained setback to improve export competitiveness. The weekly
crop progress report had winter wheat harvest at 85% vs. the 80% average,
spring wheat was 2% harvested versus 5% on average. Spring wheat conditions
improved 1% to 71% good to excellent. The Chicago values remain higher than the
Kansas City values, which indicates the ongoing quality concerns. On the
September Kansas City wheat chart, support is the fresh low at 4.98 with the
10-day moving average resistance at $5.20.
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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