DTN Midday Grain Comments 06/20 11:54
All Grains Higher at Midday
Trade is broadly firmer at midday.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are firmer with the Dow 150 higher. The dollar
index is 30 lower. Interest rate products are weaker. Energies are sharply
firmer with crude 2.90 higher. Livestock trade is mostly lower. Precious metals
are firmer with gold 39.90 higher.
Corn trade is 6 to 9 cents higher with buying returning during the day
session as the spreads weaken slightly. The forecast looks to trend towards
warmer and drier into July with near-term rains lingering in many areas.
Ethanol margins are compressing this morning with ethanol futures gaining 2-3
cents while corn firms, and unleaded jumps 6 cents. The trade continues to
debate acreage losses and the yield effects of the late wet-planting conditions
that will keep uncertainty in this market for the growing season. The weekly
export sales remain soft at 38,400 metric tons of old crop, and 360,800 of new,
and 122,000 to Mexico on the daily wire. Corn basis remains on a firmer trend.
On the July nearby chart support is the 10-day at $4.37, with the 20-day at
$4.28 below there. The new high printed Monday at $4.64 is notable chart
Soybean trade is 8 to 11 cents higher with buying returning after the choppy
trade. Meal is 4.50 to 5.50 higher, and oil is 10 to 20 points higher. Crush
margins remain solidly positive overall with meal returning to the lead today.
World export demand remains slow, and the South American currencies cheap but
firming vs. the dollar after the Fed statement, with the USDA reporting 189,000
metric tons sold on the daily wire. Field work will likely be slowed again in
many areas with more insurance days passing for soybeans before potential more
open weather at the end of the month with trade trying to hold on to acres with
November near the contract highs. The weekly export sales were better at
571,000 metric tons of old crop, and 200,000 metric tons of new, meal was
109,600 metric tons of old, and 37,700 metric tons of new. The July chart
support is the 100-day at $8.97, with next resistance the 200-day at $9.07
which we are above at midday, then the recent high at $9.21.
Wheat trade is 2 to 5 cents higher at with winter wheats overcoming harvest
pressure during the day session. The Kansas City/Chicago spread is swinging
back to Kansas City this morning, narrowing by a penny. The heavy rains are
slated more for the north and east parts of the winter wheat belt while harvest
should build elsewhere, with heat expected to help push things along to the
west with harvest spreading into south-central Kansas. The dollar is testing 96
on the index with the sharp pullback after the Fed statement. Black Sea area
weather remains mixed with world values soft. Hard red wheat is working into
feed rations in some areas with the bounce in corn values, and reduced quality
may increase feeding on that front. The weekly export sales were disappointing
at 187,600 metric tons. On the July Kansas City chart support is the 100-day at
$4.51 with resistance again the 20-day at 4.59, which we are just above.
David Fiala is a DTN contributing analyst and the President of FuturesOne
and a registered adviser
He can be reached at email@example.com
Follow him on Twitter @davidfiala
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