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DTN Midday Grain Comments 08/16 10:53
Corn Leads Positive Trade at Midday
Corn is 4 to 5 cents higher; soybeans are 3 to 5 cents higher and wheat is
mixed. Outside markets are lightly positive.
By David Fiala
DTN Contributing Analyst
General Comments
The U.S. stock market indices are firmer with the Dow 260 higher. The dollar
index is 5 higher. Interest rate products are firmer. Energies are mixed with
crude up 0.20. Livestock trade has cattle higher with hogs mostly higher.
Precious metals are weaker with gold $11.30 lower.
CORN
Corn is 4 to 6 cents higher at midday with trade trying to get a second
positive day to close out the week and ease oversold conditions that have built
post USDA reports. The weather forecast looks to be a non-issue in the near
term for most with rains slated for many areas and September extended forecasts
showing warmer-than-normal temps for the belt, curbing frost concerns for the
moment. Ethanol margins remain poor with blenders seeing the most short-term
benefits with ethanol futures edging higher this morning. Basis remains mixed
overall. On the September nearby chart, support is likely the $3.59 low with
the lower Bollinger Band at $3.57 below that. Resistance is the 10-day at
$3.89, reflecting the break this week.
SOYBEANS
Soybean trade is 4 to 6 cents higher with the firmer overnight action
continuing, with light follow through during the day session. Meal is $1.00 to
$2.00 higher and oil is 5 to 15 points higher. NOPA crush came in Thursday at
168.093 million bushels, much above the 155.826 mb estimate. Basis remains flat
overall. The Brazilian real is recovering off of fresh lows scored Thursday and
the Argentina peso still at rock-bottom prices. The weather looks to be a
short-term non-issue for soybeans as well. USDA announced 296,500 metric tons
sold to unknown for new crop. The September chart support is the lower
Bollinger Band at $8.43 below that. The next level of resistance is the 10-day
at $8.64, which we are testing at midday.
WHEAT
Wheat trade is narrowly mixed at midday, with trade looking to see if the
spread reversal for KC sticks from Thursday, along with oversold conditions
starting to ease. The corn/hard red winter wheat spread has narrowed 6 cents
this morning, after getting back to 30 on Thursday. KC wheat is now back to
competitive on the world market trading at a discount to the lowest offers in
the most recent GASC tender. Spring wheat harvest should expand with winter
wheat just about wrapped up, with Europe continuing to move toward spring wheat
harvest as well. The September KC chart support is the new low at $3.80 3/4
with the first resistance the $4.00 area.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser.
He can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
(CZ)
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