DTN Midday Grain Comments 07/27 12:16
All Grains Higher at Midday
Midday trade is seeing light gains with some pullback from the earlier highs.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow futures up 50 points.
The interest rate products are lower. The dollar index is 30 points higher.
Energies are flat to firmer with crude up 0.05. Livestock trade is mixed.
Precious metals are higher with gold up $8.60.
Corn trade is 2 to 3 cents higher at midday with trade trying to build on
the positive close yesterday with the forecast cooler and drier in the near
term. Temperatures should be normal to below normal so without stressful
weather market bulls may have trouble near term, but the rains disappointed in
the drier parts of Iowa. Ethanol margins have improved this week with the
strength in the energy complex and lower corn futures although they have
narrowly slightly the last day and a half, with ethanol futures edging higher
this morning. Corn basis remains soft with plenty of old crop stocks still
around. Weekly export sales were soft at 92,000 metric tons of old crop and
486,600 of new crop. On the December chart support is at the new July low made
earlier in the week at $3.80 1/2 with resistance at the 200-day at $3.88 which
we are just above at midday then the 10-day at $3.91.
Soybean trade is 5 to 7 cents higher at midday with light buying after rains
were disappointing in much of Iowa. Meal is $2 to $3 higher and oil is narrowly
mixed. Cooler temperatures will limit upside in the near term, even with the
disappointing rain coverage. We still have 6 important weeks of weather ahead
for beans with cooler and drier weather expected in the near term. Basis has
remained steady to firm, with good nearby export demand at the gulf noted and
Palm oil making two month highs. Weekly export sales were good at 303,400
metric tons old crop, and 531,800 metric tons of new, 6,700 of old crop meal,
55,200 of new crop meal, and 14,900 of oil. On the November chart support is at
the 20-day at 10.02 with resistance at the 10-day at 10.07.
Wheat trade is 3 to 7 cents higher with trade working to bounce back from
oversold conditions as the spring wheat tour continues to move into the drier
growing areas with recent yields in the mid-30s after abandoned acres are taken
out. The dollar remains near year lows, but Jordan postponed its tender leaving
France as the most recent winner of export business. Trade continues to add
carry in the spring wheat, with winter wheat keeping the ample carry in place.
Weekly export sales were mediocre at 498,000 metric tons. On the December
Kansas City contract support is the 100-day at $4.94. Resistance is at the
50-day at $5.11 then the 10-day at $5.20.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered Advisor.
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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