DTN Midday Grain Comments 07/18 11:25
Grains Lower at Midday
Corn is the downside leader with broad weakness at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are weaker with the Dow 120 lower. The dollar
index is 5 lower. Interest rate products are mostly higher. Energies are lower
with crude 1.90 lower. Livestock trade is mixed with hogs leading. Precious
metals are mixed with gold 3.10 higher.
Corn trade is 10 to 12 cents lower at midday with better than expected rains
and little fresh bullish news to support the market near term. Warm weather
will linger in the near term, but better than expected rains have shown up in
spots. Ethanol margins will remain tight with plentiful supply and summer
driving season coming to an end and ethanol futures back below $1.45 a gallon.
Harvest should be on the downhill slide for Brazil with more signs of imports
into the SE U.S., with mixed conditions elsewhere. Basis has started to
moderate in some areas as well, with intramonth spreads firmer even with the
weakness this a.m. The weekly export sales remain disappointing at 200,009
metric tons of old crop, and 132,997 of new crop. On the September nearby
chart, support is at the 50-day at $4.25 which we have tested this morning with
resistance the 10-day at $4.39, which we tested but did not hold.
Soybean trade is 2 to 4 cents lower at midday, following the lead of the
corn with some moments of two sided trade. Meal is flat to 1.00 lower, and oil
is flat to 10 points lower. Crush margins have narrowed but remain positive.
World export demand remains slow, with the ral still cheap vs. the dollar with
some gains overnight. Weather will come into focus more as we head towards
August and podfill season. The weekly export sales remain soft at 127,890
metric tons of old crop, 198,327 of new, 65,827 metric tons of old crop meal,
149,500 of new crop meal, and 12,193 of oil. The September chart support is the
50-day at 8.82, with the next level up the 100-day at 8.97, with the 20-day the
next round at $9.01.
Wheat trade is flat to 8 cents lower with early strength fading again as
harvest continues along with pressure from the row crops. The Kansas
City/Chicago spread is slightly narrower this a.m. The corn/HRW spread has
narrowed as well. The warmer weather should allow harvest to progress to move
to the home stretch, while Europe makes progress, and the Black Sea continues
to see mixed yields as harvest rolls on. The dollar is just below 97 on the
index with weaker action today. Weekly export sales remain soft at 347,920
metric tons. The September Kansas City chart support is the recent low at $4.32
with the first resistance the 10-day at 4.47, which we failed to hold with the
100-day at 4.51 the next round up.
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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