DTN Midday Grain Comments 07/23 10:42
Grain Futures Heading Lower Midday Friday
Corn is 13 to 14 cents lower, soybeans are 7 to 10 cents lower and wheat is
flat to 9 cents lower.
David M. Fiala
DTN Contributing Analyst
The U.S. stock market is firmer with the Dow up 250 points. The U.S. Dollar
Index is 0.15 higher. Interest rate products are weaker. Energies are mixed
with crude down $0.20. Livestock trade is flat. Precious metals are weaker with
gold off $5.50.
Corn trade is 13 to 14 cent lower at midday Friday with trade fading back to
the lower end of the recent range with little fresh news to induce buyers into
the weekend. Ethanol margins should stabilize with the corn pullback and energy
rebound from the beginning of the week. Brazil will continue to evaluate the
second crop as estimates drift lower, while the U.S. pushes deeper into
pollination with a warmer and drier days ahead and potential relief the second
week. Corn basis has remained flat with cash inverses likely to see more
pressure as wheat and southern sorghum start to become available to feed. On
the September contract, trade slipped back below the 20-day at $5.60 with
further support at the lower Bollinger Band at $5.20.
Soybeans are 7 to 10 cents lower at midday with trade working more sideways
after the volatile day Thursday with some improvement in the extended forecast
and meal still struggling to sustain a rally. Meal is $4.50 to $5.50 lower and
oil is 0.30 cent to 0.40 cent higher. The weather pattern is warmer and drier
short term, with rains towards the end of the second week for much of the belt.
South America will continue to ship soybeans while the run in canola values
turn more sideways. Basis levels have been flat to weaker in recent days.
Mexico secured 100,000 metric tons of new crop on the daily wire. On the
September soybean chart, support the 20-day at $13.64, which we are just below
at midday, with the lower Bollinger Band at $12.85.
Wheat trade is 1 to 10 cents lower at midday with spring wheat giving up
early gains to turn lower again with KC gaining in spread action. Harvest will
continue to expand across Europe and the Black Sea with mixed results so far
while the dollar will provide headwinds at the upper end of the range with
action consolidating around 93 points on the index. KC holds at 35-cent
discount to Chicago narrowing Friday with Minneapolis at a 206-cent premium
gaining 40 cents from the lows Thursday. KC September on the chart has support
at the 20-day at $6.28 with resistance the upper Bollinger Band at $6.81.
David Fiala can be reached at email@example.com
Follow him on Twitter @davidfiala
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