DTN Midday Grain Comments 05/17 11:09
Corn, Wheat Higher at Midday
Corn and wheat remain bid on weather, with soybeans fading.
By David Fiala
DTN Contributing Analyst
The U.S. stock market indices are higher with the Dow 55 points higher. The
interest rate products are mixed. The dollar index is 10 higher. Energies are
mixed with crude up 0.45. Livestock trade is mixed with cattle leading.
Precious metals are lower with gold down 10.50.
Corn trade is 3 to 4 cents higher at midday with support from the continued
wet forecasts with some planting progress this week, with more focus on
potential acre losses coming forward with December corn unable to move through
$4.00 so far. Drier weather will end for most going into the weekend. Ethanol
margins are narrowing fast with ethanol futures unable to keep pace with the
corn rally with slight gains this morning. Basis has seen selling pressure from
farmer movement. On the July nearby chart support is the 100-day at $3.81 which
we moved above overnight, with the 200-day at $3.87 the next level up.
Soybean trade is 10 to 12 cents lower at midday with trade struggling to
extend higher with fears of higher acres and poor demand along with spread
unwinding. Meal is $4.50 to 5.50 lower and oil 35 to 45 points lower. Crush
margins remain solidly positive. South American currencies remain cheap at the
end of harvest, but rising basis is helping US offset somewhat. Field work
should generally remain slow in the near term but more progress is likely into
next week with little incentive for farmers to push right now. Trade talks are
expected to continue, but more U.S. gov't payments to farmers looks to be the
more likely outcome at this point with up to 20 billion in aid promised, and
the exact set up still to be determined. The July chart support is the 10-day
moving average at $8.25, with with the 20-day at $8.44 just above the market.
Wheat trade is 2 to 6 cents higher at midday with the higher protein wheats
leading, and the Kansas City/Chicago spread looking to put in a reversal.
Europe and the Black Sea area will be watched with dryness in the Volga Valley,
and wet weather in the U.S. potentially limiting planting and causing disease
issues in the winter wheat. The dollar remains rangebound but firmer. Hard red
wheat is working into feed rations in some areas with the bounce in corn
values. On the July Kansas City chart, support is the 20-day at $4.05 that we
moved above yesterday, with the 10-day at $4.04 below that, and the 50-day at
$4.27 the next round higher which we have tested.
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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