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DTN Midday Grain Comments 08/15 11:07
Corn, Soybean, Wheat Futures Lower at Midday
Corn futures are 16 to 18 cents lower at midday Monday; soybean futures are
48 to 55 cents lower; wheat futures are 9 to 15 cents lower.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
Corn futures are 16 to 18 cents lower at midday Monday; soybean futures are
48 to 55 cents lower; wheat futures are 9 to 15 cents lower. The U.S. stock
market is firmer with the DOW up 40 points. The U.S. Dollar Index is 65 points
higher. Interest rate products are firmer. Energies are sharply weaker with
crude down 4.10. Livestock trade is mixed. Precious metals are weaker with gold
$20.00 lower.
CORN:
Corn futures are 16 to 18 cents lower at midday with trade putting a small
gap lower on the open before fading further with improved weather for the
Western Corn Belt this week, along with pressure from outside markets,
especially energies. Short-term forecasts have moisture for some of the drier
areas to start the week with more moderate temperatures. Weekly export
inspections were softer at 538,406 metric tons (mt). Ethanol margins will
continue to be limited by driving demand and seasonal slowdowns with unleaded
futures back to the lows this morning before finding support. Basis will be
watched to see how much further strength fades, especially with the board rally
and harvest starts in the South. On the WASDE report, yield came in at 175.4
bushels per acre (bpa) versus. 175.8 bpa expected. Production edged lower to
14.389 billion bushels (bb). New crop carryout faded from 1.470 bb to 1.388 bb.
World numbers edged slightly lower. The weekly USDA Crop Progress report is
expected to show conditions steady to lower, with maturity just behind the
five-year average. On the September chart, support is the 20-day moving average
at $6.04 and the upper Bollinger Band is the next round up at $6.40, which we
faded back from Friday's close.
SOYBEANS:
Soybean futures are 48 to 55 cents lower at midday with better rains and
weaker energies putting pressure on action Monday morning after the mostly
negative WASDE report, while spread trade reversed course. Meal is $15.00 to
$16.00 lower, and oil is 60 to 70 lower On the WASDE report, yield rose .4 bpa
to 51.9 bpa versus 51.1 bpa expected with acres slightly lower to leave
production mostly flat. Carryout was 225 million bushels (mb) versus 215 mb
expected. World numbers edged just a bit higher on stocks. Biodiesel margins
remain positive but narrowing in recent days. South America is on post-harvest
footing for shipping with their advantage to persist until September, while the
bulk of the U.S. is heading into the start of pod-fill season with less
stressful weather this week expected. Basis has rebounded with the old-crop
strength the last couple days as well. Weekly export inspections showed
improvement again at 744,571 mt. Weekly crop progress is expected to show
steady to slightly lower conditions, with maturity getting closer to the
five-year average. On the September soybean chart, support is the 20-day moving
average at $14.35, which we are well above, while November bounced off the
20-day moving average at $13.94, with the Upper Bollinger Band at $15.64, which
we have faded from.
WHEAT:
Wheat futures are 9 to 15 cents lower at midday with negative spillover from
the row crops and the dollar pulling trade back from the recent highs with a
bounce off the early test of support. The report edged world numbers slightly
lower, with domestic carryout falling to 610 mb from 639 last month. Plains
weather looks for better short-term moisture with deficits needing to be eased
ahead of planting. Spring wheat harvest should expand significantly this week.
The dollar is rebounding a bit with mixed inflation ideas. Black Sea potential
is still being watched as ships continue to trickle out of Ukraine. Egypt has
been making some purchases without tenders while MATIF values edge higher.
Weekly export inspections faded a little bit to 373,227 mt. Weekly crop
progress should show winter wheat harvest effectively complete. Spring wheat
conditions should be steady to lower and harvest still well behind the
five-year average. The KC September chart had resistance at the 20-day moving
average at $8.62, which trade bounced off again, with the Upper Bollinger band
at $8.98, the next round up.
David Fiala can be reached at dfiala@futuresone.com
Follow him on Twitter @davidfiala
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