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DTN Midday Grain Comments 08/09 10:54
Grain Futures in the Green Midday Tuesday
Corn trade is 9 to 10 cents higher; beans are 22 to 37 cents higher and
wheat is flat to 6 cents higher.
David M. Fiala
DTN Contributing Analyst
MARKET SUMMARY:
Corn trade is 9 to 10 cents higher; beans are 22 to 37 cents higher and
wheat is flat to 6 cents higher. The U.S. stock market is weaker with the Dow
down 15 points. The U.S. Dollar Index is 0.25 lower. Interest rate products are
weaker. Energies are firmer with crude up $0.60. Livestock trade is mostly
lower. Precious metals are mixed with gold $3.00 higher.
CORN:
Corn trade is 9 to 10 cents higher at midday Tuesday with trade gapping
higher on condition declines, short-term forecasts and ideas of good commercial
support as we head towards the WASDE report later in the week with action just
off the highs at midday. Short-term forecasts show drier weather for most in
the near term with higher-than-normal temperatures for the center and western
parts of the belt with moderation expected the second week. The export wire
showed some life again Tuesday with 132,000 metric tons sold to China for new
crop. Ethanol margins will continue to be limited by driving demand and
seasonal slowdowns with unleaded futures just off six-month lows to crimp
blending margins if sustained. Basis will be watched to see how much further
strength fades, especially with the board rally and harvest starts in the
South. Weekly crop progress showed good to excellent down 3% to 58% good to
excellent, with 16% poor to very poor while 90% was silking versus 93% on
average, 45% in the dough, and 49% on average, and 6% dented vs. 9% on average.
On the September chart, support is the fresh low at $5.61 1/2 scored two weeks
ago with lower Bollinger Band just below that at $5.60, with trade holding back
above the 20-day at $5.99 and the upper Bollinger Band is the next round up at
$6.27, which we are just below.
SOYBEANS:
Soybean trade is 22 to 37 cents higher at midday with trade gapping higher
as well on weather concerns and expectations of improved demand potentially
into fall. Meal is $12.50 to $13.50 higher and oil is narrowly mixed. 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 podfill
season with warmer and drier weather for much of the belt this week before
moderating after the mixed weekend rains with good to excellent 1% lower to 59%
good to excellent, and 11% poor to very poor with 89% blooming versus 88% on
average, and 61% setting pods versus 66% on average. Basis is fading a bit at
processors and exporters in recent days as early harvest in the south draws
closer. On the September soybean chart, support is the 20-day at $13.99 which
we bounced off last week, with the upper Bollinger Band at $15.10 as the next
round up, which we got close to overnight before fading a touch.
WHEAT:
Wheat trade is flat to 6 cents higher at midday with wheat following the gap
in row crops higher before turning to two-sided, rangebound action with trade
looking for confirmation on U.S. demand as spring wheat harvest gets going,
along with how bushels flow out of the Black Sea and Europe short term. Weather
in the Plains looks warmer and drier this week with moisture needing to build
before planting time with late harvest lagging at 86% harvested versus 91% on
average, and spring wheat 9% harvested versus 19% on average, with conditions
off 6% on good to excellent to 64%, and poor to very poor at 8%, while spring
wheat sees heat with harvest getting going and steady weekly conditions
expected on the weekly report with maturity still well behind normal. The
dollar remains near the highs which is likely to limit exports short term. The
KC September chart has resistance at the 20-day above the market at $8.57 which
we faded from yet again, with the lower Bollinger Band at $8.22 the next round
down, which we held above so far.
David Fiala can be reached at [email protected]
Follow him on Twitter @davidfiala
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