DTN Midday Grain Comments 08/17 10:59
Grains Mixed at Midday
Wheat trade leads at midday with row crops action slightly lower.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are mixed with the Dow futures up 36. The
interest rate products are weaker. The dollar index is 34 points lower.
Energies are mostly higher with crude up 0.45. Livestock trade is narrowly
mixed. Precious metals are higher with gold up $1.70.
Corn trade is 1 to 2 cents lower at midday with trade fading slightly off as
soybeans turn lower and wheat fades from the high. Ethanol margins remain
tighter with corn at the upper end of the recent range and summer driving
season winding down with ethanol futures down another penny or so this morning.
Corn basis will likely continue to fade with more harvest activity building
with the advanced crop and with the higher board. On the December chart,
futures have support at the 20-day moving average at $3.78 which we are testing
at midday with the post-report low below at $3.66 with resistance the recent
high at $3.88.
Soybean trade is 6 to 9 cents lower with trade backing off the highs seen
overnight after the strong buying yesterday on talk of further trade
negotiations with China and little fresh news this morning. Meal is $3.50 to
$4.50 lower and oil is 5 to 15 points lower. Trade is well off the post-report
lows, with late coming shorts getting squeezed out of the market. Basis
continues to crumble ahead of harvest with early harvest just over the horizon
and the export program under booked for fall. On the November chart support is
at the $8.88 20-day which we are just above at midday, then down at the $8.51
one-month low printed on Monday. Resistance is the $8.99 1/2 weekly high then
the $9.22 2-month high.
Wheat trade is 8 to 15 cents higher at midday with volatile trade continuing
with trade 20 cents higher overnight briefly with continued talk about export
issues coming forward from the Black Sea with talk that eventually Russia will
have an upper limit on exports this year, but nothing is confirmed or defined
yet. Spring wheat harvest should continue to move along at a good clip. The
strong U.S. dollar is keeping the U.S. less competitive on the world market
with the ongoing issues with Middle Eastern importers focusing on the Black Sea
for origination. Matif wheat solidly higher this morning, giving us support as
well. Australia remains on the dry side with the crop pace ahead of normal as
well with some relief for some areas. On the December Kansas City chart, we
have support at the low printed yesterday at $5.60 3/4 then the 100-day at
5.55, with resistance the 10-day at 5.89, which we are just below at midday
with the overnight high at 5.96.
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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