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DTN Midday Grain Comments     07/20 11:05

   Grains Trending Higher at Midday

   Wheat and corn lead at midday, with soybeans flat.

By David Fiala
DTN Contributing Analyst

 General Comments

   The U.S. stock market indices are weaker with the Dow futures down 130. The 
interest rate products are firmer. The dollar index is 55 points lower. 
Energies are mostly firmer with crude up $0.50. Livestock trade is mostly lower 
ahead of the cattle on feed report. Precious metals are firmer with gold up 
$4.80.

   CORN

   Corn trade is 3 to 4 cents higher at midday with trade continuing to firm 
after the strong close yesterday. On the chart, it appears the market is trying 
to move through nearby resistance, with trade moving above another level 
overnight with a positive close needed to confirm. Cooler weather looks to hang 
around the next couple weeks with mixed moisture potential with a growing focus 
on early August weather with the advanced state of the crop. Ethanol board 
margins remain positive but have narrowed with firmer corn and weaker energy 
trade, but ethanol futures trending back higher to narrow blender margins, 
although they remain strong. Corn basis has been flat to firmer for the most 
part. On the September chart futures are above the 10-day at $3.47, with the 
20-day at $3.52 the next level to close above, with trade 3 cents above that 
area at midday, the next level of resistance would be the upper Bollinger band 
at 3.67. Support is the fresh low of $3.37 1/4 scored last week, which is also 
the level of the lower Bollinger Band. 

   SOYBEANS

   Soybean trade is 1 to 3 cents higher at midday with trade shaking off fresh 
tariff talk to keep moving higher with the market looking for 5 straight days 
of gains. Meal is flat to $1.00 lower, and oil is 10 to 20 points higher. 
Brazil remains at a stout premium to US origin, still running $2.00 or better, 
which mostly offsets the tariffs. Bean basis has remained steady with 
processors taking the lead with crush margins remaining exceptionally strong. 
Weather should not be a major driver near term for soybeans due to limited 
stressful forecasts but with pod fill starting, beans could be more active 
based upon any forecast changes.  On the August chart, the 10-day at $8.40 is 
again the first level of support, which we have not been able to follow through 
with further support the lower Bollinger Band at 8.15 with the next level 
resistance the 20-day at 8.54.

   WHEAT

   Wheat trade is 10 to 18 cents higher overnight with trade consolidating it's 
push through the $5.00 area on front month winter wheat, with Chicago and 
Kansas City trade moving over that level overnight, and better spring wheat 
action today. Harvest pressure should start to fade as it winds down for the 
winter wheat. Spring wheat progress will slow a bit in North America with the 
cooler weather. Russian harvest continues to move along as well with yields 
remaining below last year's levels as they get into spring wheat harvest, 
although they have improved a little more as harvest expands. Western Europe 
continues to see excessive heat as harvest moves forward there. HRW basis has 
remains solid through harvest with the better protein with offered premiums 
declining. On the September chart, Kansas City is back above the 20-day at 
$4.89 and the 10-day at $4.91 at midday with the 200-day at 5.11 the next level 
of resistance, which we have tested this morning, with the next round of 
resistance at the 50-day at 5.23.

   David Fiala is a DTN contributing analyst and the President of FuturesOne 
and a registered adviser. 
He can be reached at dfiala@futuresone.com 
Follow him on Twitter @davidfiala


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