DTN Midday Grain Comments 07/22 11:01
All Grains Lower at Midday
Broadly lower trade to start the week.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow 30 lower. The dollar
index is 10 higher. Interest rate products are weaker. Energies are mixed with
crude 0.30 higher. Livestock trade is mixed with cattle leading. Precious
metals are mixed with gold 0.80 higher.
Corn trade is 5 to 7 cents lower at midday with trade going back to test
support coming out of the weekend with a cold front bringing rains to many.
Warmer 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. Harvest should
be on the downhill slide for Brazil with more signs of imports into the SE
U.S., with mixed world conditions and plentiful feed wheat available. Basis has
started to moderate in some areas as well, with intramonth spreads firmer this
morning. Weekly export inspections were soft at 438,045 metric tons. Weekly
crop progress should show steady conditions with maturity gaining but still
behind normal. On the September nearby chart, support is at the 50-day at $4.27
which we are just below at midday with the 100-day below that at $4.03, with
resistance the 10 and 20-day at $4.36.
Soybean trade is 8 to 11 cents lower with trade fading back from the trade
optimism gains from Friday at midday. Meal is 1.50 to 2.50 lower, and oil is 15
to 25 lower. 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
expected to show steady conditions, and maturity gaining a little. Weekly
export inspections were soft at 559,542 metric. The September chart support is
the 50-day at 8.82, with the next level up the 100-day at 8.96 which we are
holding at midday, with the 20-day the next round at $9.00, which we are right
at overnight, with 200-day at $9.16 the next level up.
Wheat trade is 1 to 4 cents lower with trade following the lead of the row
crops yet again. The Kansas City/Chicago spread has narrowed slightly
overnight. The corn/HRW spread is wider as well. 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 just below 97 on the index with firmer
action to open the week. Weekly export inspections are expected to be in the
300,000 to 450,000 metric ton range. Weekly crop progress should put winter
wheat harvest around 72-75% complete, with spring wheat conditions steady and
heading closing in on 90%. The September Kansas City chart support is the
recent low at $4.31 with the first resistance the 10-day at $4.45, with the
100-day at $4.50 the next round up.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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