DTN Midday Grain Comments 06/15 11:19
Grains Mixed at Midday
Corn is the midday leader with trade well off the overnight lows with the
chart looking like an upside reversal at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow down 250 lower. The
interest rate products are lower. The dollar index is 5 points lower. Energies
are weaker with crude down 2 cents. Livestock trade is sharply higher. Precious
metals are weaker with gold down $25.50.
Corn trade is 2 to 4 cents higher at midday with trade bouncing sharply off
the overnight lows with sell the rumor buy the fact action in place. Forecasts
remain in flux with heat and rain featuring for most with heat looking to
intensify into the weekend with forecast disagreement after that, with better
rains for the western belt. Harvest should continue to expand in the double
crop areas of Brazil. Ethanol margins have narrowed this morning with the
energy complex weakness. Basis has been flat to firmer in recent days with the
lower board. On the July chart we remain below the 10-day, at $3.75 which is
now nearby resistance and then the 200-day at $3.82. Nearby support is the
$3.55 fresh low which we are 12 cents above at midday!
Soybean trade is 8 to 10 cents lower at midday with two sided action after
tariffs announcements with lows around 24 cents lower. Meal is flat to $1
higher and oil is 45 to 55 points lower. Meal is now $70 off the highs. Bean
basis has remained steady, with trade likely to remain quiet in the near term
as old crop exports remain slow. We remain well away from the key soybean
weather time frame keep concerns limited for now. Formal tariffs by China and
possibly Mexico are likely to be announced over the weekend. Brazil continues
to struggle with the logistical issues compounded by the trucker strikes with a
large shipping line up. On the July chart, trade is back below all the major
moving averages with the 10-day at 9.63 the first level of resistance, with the
lower Bollinger Band at 9.18 support.
Wheat trade is mixed at midday with winter wheat contracts leading the
charge back off the lows. Wet weather for Kansas should slow harvest in the
next week or so, but good progress is likely through Monday. Spring wheat
should see better progress with warmer weather helping to catch up emergence
along with more rain while Canada remains drier. Australia should see some
improvement but overall remains mixed. The Black Sea remains on the dry side
near term, with Russian spring wheat weather remaining mixed with improvement
in Ukraine. HRW basis has improved ahead of the anticipated harvest protein
improvement and board weakness. On the July Kansas City, we are just above the
20-day moving average at 5.19 with the 50-day at $5.31 above that. Support is
the $4.96 200-day moving average.
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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