DTN Midday Grain Comments 06/19 11:22
All Grains Lower at Midday
Trade remains lower at midday, but has bounced significantly off the lows.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are lower with the Dow down 280 lower. The
interest rate products are lower. The dollar index is 20 points higher.
Energies are lower with crude down $1.00. Livestock trade is mixed with cattle
leading. Precious metals are lower with gold down $2.70.
Corn trade is 1 to 3 cents lower at midday with the escalating trade tension
and near-term rains keeping the pressure on the market, but are 12 cents off
the lows of the day. Harvest should continue to expand in the double-crop areas
of Brazil with open weather. Ethanol margins are stable with lower corn and
energy prices with ethanol futures touching $1.38, which provides very strong
blender margins with unleaded over $2.00 still. Basis has been flat to firmer
in recent days with the lower board. Weekly crop progress showed improvement to
78% good to excellent and 4% poor to very poor with emergence at 98% vs. 97% on
average. On the July chart we remain below the 10-day, at $3.72, which is now
nearby resistance and then the 200-day at $3.82. Nearby support is the $3.38
3/4 fresh low from this morning.
Soybean trade has fought back to the overnight levels, down 23 to 28 cents,
with trade getting close to limit-lower trade early on in the session as China
pledged to stay firm in the trade war. Meal is $3 to $4 lower and oil is 60 to
70 points lower. Bean basis has remained steady to firmer, with trade likely to
remain quiet in the near term as old crop exports remain slow with Brazilian
values rising rapidly on the anticipation of increased Chinese business.
Widespread rains should boost near term growth. Brazil continues to struggle
with the logistical issues compounded by the trucker strikes with a large
shipping line up. Weekly crop conditions were 1 percentage point lower at 73%
good to excellent, and 5% poor to very poor with planting at 97% complete vs.
91% on average, with 90% emerged vs. 81% emerged. On the July chart, trade has
support at the fresh low at 8.41, and resistance the 10-day at $9.40.
Wheat trade is 10 to 18 cents lower with spillover pressure from the row
crops, and harvest pressure continuing. Wet weather for Kansas should slow
harvest in the next week or so, but good progress is likely through today with
much of the areas east of U.S. Hwy 81 complete. Spring wheat should see good
progress with Canada remaining drier. Australia should see some improvement but
overall remains mixed. Russian winter wheat is likely to remain on the dry
side, with the spring wheat cool and wet. HRW basis has remains solid ahead of
the anticipated harvest protein improvement and board weakness. Weekly crop
progress had winter wheat 1 percentage point better at 39% good to excellent,
and 33% poor to very poor with 91% headed same as average, and 26% harvested,
vs. 19% on average. Spring wheat was 8% better at 78% good to excellent and 4%
poor to very poor, with 9% headed vs. 12% on average. On the July chart, Kansas
City is back below all the major moving averages with the 200-day at $4.96 the
closest to the market, and $4.71 becoming support as the fresh low.
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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