DTN Midday Grain Comments 07/13 11:03
Grains Mixed at Midday
Row crops are weaker at midday but off the lows, while wheat works higher.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are firmer with the Dow up 90. The interest
rate products are weaker. The dollar index is 5 points higher. Energies are
mixed with crude up 0.70. Livestock trade is mixed. Precious metals are mixed
with gold down $3.80.
Corn trade is 3 to 4 cents lower at midday with trade seeing spillover
pressure from the soybeans rolling lower after initial strength following the
report and overnight. Cooler weather begins working through the belt today with
wetter weather also expected. Ethanol board margins remain stable with corn and
ethanol futures lower this morning. Corn basis has been flat to firmer in
recent days with the lower board. The WASDE report kept yields unchanged at
174.0 BPA with production up slightly to 14.320 billion bushels, with old crop
carryout at 2.027 billion bushels, and new at 1.552, vs. expectations of 2.106
and 1.733 billion bushels. The world stocks were 191.7 million metric tons of
old crop vs. 191.3 expected, and new crop at 152.0 vs. 154.7 million metric
tons expected. On the September chart we remain below the 10-day at $3.50, with
the 20-day at $3.57 the next round up. Support is the fresh low of $3.37 scored
yesterday with the lower Bollinger Band at $3.39 above that.
Soybean trade is 11 to 14 cents lower at midday with trade going to new lows
this morning before firming a bit, with the big carryout increasing hanging
over the market. Meal is $3 to $4 lower and oil is 30 to 40 points lower.
Brazil remains at a stout premium to US origin, which is compounded by the
ongoing logistics issues with Brazil with premiums around $1.90 right now. Bean
basis has remained steady with processors taking the lead. The daily export
wire has remained quiet. Weather should continue to push growth along in the
near term. On the WASDE report, yield was unchanged at 48.5 BPA with production
of 4.310 billion bushels, with old crop carryout at 465 million vs. 507 million
expected, with 580 million of new vs. 385 expected. World stocks were 96.0
million old crop vs. 92.5 million expected, and new crop at 98.3 million metric
tons vs. 87.0 expected. On the August chart the 10-day at $8.48 is again the
first level of resistance with further support the lower Bollinger Band at 8.18
with the next level resistance the 20-day at 8.69.
Wheat trade is 4 to 10 cents higher at midday with trade trying to separate
from the row crop trade and continue to firm again. Harvest progress should
continue to push along with the homestretch ongoing for the Plains. Spring
wheat should see good progress in Canada with better rains starting to show up
over the Prairie provinces. Russian harvest continues to move along as well.
HRW basis has remains solid through harvest with the better protein with
offered premiums declining. The WASDE report had production at 1.881 billion
bushels, up from 1.827 last month with old crop carryout at 1.1 billion vs.
1.098 expected, and new at 985 million vs. 946 expected. World stocks were
273.5 million metric tons vs. 272.3 expected on old crop, with 260.9 on new vs.
264.1 expected. On the September Kansas City is back below the major moving
averages with the 10-day at 4.90 as resistance which we have tested this
morning and support the lower Bollinger Band at $4.57.
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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